Alphabet Inc's Google said it would pay $1.1 billion for the division at Taiwan's HTC Corp that develops the U.S. firm's Pixel smartphones - its second major foray into phone hardware after an earlier costly failure.
The all-cash deal will see Google gain 2,000 HTC employees, roughly equivalent to one fifth of the Taiwanese firm's total workforce. It will also acquire a non-exclusive license for HTC's intellectual property and the two firms agreed to look at other areas of collaboration in the future.
While Google is not acquiring any manufacturing assets, the transaction underscores a ramping up of its ambitions for Android smartphones at a time when consumer and media attention is largely focused on rival Apple Inc.
"Google has found it necessary to have its own hardware team to help bring innovations to Android devices, making them competitive versus the iPhone series," said Mia Huang, analyst at research firm TrendForce.
The move is part of a broader and still nascent push into hardware that saw Google hire Rick Osterloh, a former Motorola executive, to run its hardware division last year. It also comes ahead of new product launches on Oct. 4 that are expected to include two Pixel phones and a Chromebook.
Pixel smartphones, only launched a year ago, have less than 1 percent market share globally with an estimated 2.8 million shipments, according to research firm IDC.
Google will be aiming not to repeat mistakes made when it purchased Motorola Mobility for $12.5 billion in 2012. It sold it off to China's Lenovo Group Ltd for less than $3 billion two years later after Motorola failed to produce appealing products that could compete with iPhones.
This time around, however, the deal price tag is much smaller and the lack of manufacturing facilities also minimises risk.
HTC'S DECLINE
Google's strategy of licensing Android for free and profiting from embedded services such as search and maps has made Android the dominant mobile operating system with some 89 percent of the global market, according to IDC.
But it has long been frustrated by the emergence of many variations of Android and the inconsistent experience that has produced. Pushing its own hardware will likely complicate its relationship with Android licensees, analysts said.
Some analysts also questioned the wisdom of the deal given HTC's long decline. The Taiwanese firm once sold one in 10 smartphones globally but has seen market share dwindle sharply in the face of competition from Apple, Samsung Electronics Co and Chinese rivals.
"HTC is past its prime in terms of being a leading hardware design house, mainly because of how much it has had to scale back over the years because of declining revenues," said Ryan Reith, an analyst at IDC.
"Unless Google really wants to control hardware for its other businesses like Home and Chromebooks in addition to smartphones, then I don’t see this as being a bet that pays off."
For HTC, the deal will allow it to concentrate more on its virtual reality headsets while also reducing development costs.
"This will be a sizeable reduction in our R&D expenses. Overall it should be in the ballpark of a 30-40 percent reduction in operating expenses," HTC Chief Financial Officer Peter Shen told a news conference in Taipei.
The Taiwanese firm will continue to run its remaining smartphone business but the sharp downsizing of its mainstay operations has cast some doubt over its longer term future.
"HTC can design and produce innovative products but it lacks the deep pockets of the likes of Samsung for marketing promotions and saturation advertising," said Jake Saunders, an analyst at ABI Research in Singapore.
"Competitors in the form of Huawei, Oppo, Xiaomi and ZTE are snapping at HTC's heels."
HTC's worldwide smartphone market share declined to 0.9 percent last year from a peak of 8.8 percent in 2011, according to IDC.
HTC shares were on a trading halt on Thursday. The stock has fallen around 94 percent from a peak in 2011, giving the company a market value of around $1.9 billion.
Evercore served as financial advisor to HTC while Lazard was Google's financial advisor.
Reuters
Thu Sep 21 2017
Google Pixel phones and the Google Daydream View VR viewer are displayed during the presentation of new Google hardware in San Francisco, California, U.S. October 4, 2016. -Filepix/Reuters
Trafik internet Malaysia meningkat enam peratus pada suku pertama 2024 - Cloudflare
Malaysia catat peningkatan trafik internet keseluruhan sebanyak enam peratus pada suku pertama 2024 daripada suku keempat 2023.
Detik 100 hari ke Olimpik Paris, prospek negara masih samar
Genap 100 hari, atlet elit dari seluruh dunia dan ratusan ribu peminat sukan bakal berkumpul di Sungai Seine, Paris untuk upacara perasmian Sukan Olimpik 2024.
Gempa kuat bermagnitud 6.3 landa Jepun - MetMalaysia
Satu gempa bumi kuat bermagnitud 6.3 dikesan di Shikoku, Jepun pada 10.14 malam tadi.
Thailand, New Zealand tingkat hubungan dua hala
Thailand dan New Zealand bersetuju meningkatkan hubungan dua hala mereka kepada perkongsian strategik menjelang 2026.
Ia sekaligus menandakan langkah penting ke hadapan dalam kerjasama kedua-dua negara yang telah lama terjalin.
Ia sekaligus menandakan langkah penting ke hadapan dalam kerjasama kedua-dua negara yang telah lama terjalin.
Penumpang HSR Jakarta-Bandung cecah 2.56 juta orang
Pada masa ini, perjalanan kereta api harian kereta api itu telah meningkat daripada 14 kepada 52 dan bilangan tempat duduk penumpang melonjak daripada 8,400 kepada lebih 31,000.
Antara pembangunan, pilihan manusia & kesihatan planet
Antara pembangunan, pilihan manusia, dan kesihatan planet.
dilema yang menjadi cabaran utama buat mana-mana negara untuk keluar dari kepompong kemunduran.
Hari kedua Sidang Kemuncak Kesihatan Planet (PHAM 2024) dan mesyuarat tahunan ke-6 antaranya mengangkat topik berkaitan kecerdasan buatan (AI) yang masih menjadi perdebatan kalangan pakar.
dilema yang menjadi cabaran utama buat mana-mana negara untuk keluar dari kepompong kemunduran.
Hari kedua Sidang Kemuncak Kesihatan Planet (PHAM 2024) dan mesyuarat tahunan ke-6 antaranya mengangkat topik berkaitan kecerdasan buatan (AI) yang masih menjadi perdebatan kalangan pakar.
KKR beri jaminan projek Kolam Selam Tempur siap Jun ini - Nanta
Kementerian Kerja Raya (KKR) akan memastikan projek pembinaan Kolam Selam Tempur di Kem Iskandar, Mersing, Johor yang mengalami kelewatan, siap sepenuhnya pada Jun ini.
Pemilihan MIC bermula 27 April ini
MIC akan mengadakan pemilihan parti bagi penggal 2024-2027 dari 4 Mei hingga 6 Julai dengan hari pencalonan ditetapkan mulai 27 April ini.
Kerajaan pandang serius pihak main sentimen rakyat
Mesyuarat sepakat agar kerajaan bertindak tegas menurut lunas-lunas perundangan dan tidak berkompromi dengan sebarang tindakan melampau yang boleh menjejaskan kestabilan negara ini.
Tumpuan Khamis - 18 April 2024
Ikuti rangkuman berita utama yang menjadi tumpuan di Astro AWANI.
YouTube pihak ketiga halang iklan tidak lagi boleh strim video
Jika video cuba distrim, notifikasi "kandungan berikut tidak tersedia pada aplikasi ini" akan dipaparkan pada skrin.
Google akan tamatkan penawaran Google One VPN tahun ini
Tiada tarikh pasti diberikan, selain hanya menyatakan sokongan berkenaan akan ditamatkan pada tahun ini.
Apple, Google lesenkan gambar dan video Shutterstock untuk latih AI
Selain imej dan gambar, lesen ini juga dikatakan turut meliputi pelesenan fail-fail muzik dan juga video.
Google akan musnah berbilion data pengguna dikumpul melalui inkognito Chrome
Google didakwa boleh mengenal pasti kawan seorang pengguna, hobi, makanan dan filem kegemarannya, yang dipantau tanpa pengetahuannya.
Anda kini boleh cuba bersembang dengan Gemini pada Google Message di Malaysia
Kini, Gemini membenarkan pengguna bersembang untuk bantu cipta senarai, rancang perjalanan dan dapatkan fakta lain dengan mudah dan pantas.
Google didenda 250 juta euro di Perancis kerana data latihan AI
Mereka didapati bersalah menggunakan tulisan milik media Perancis untuk melatih model Bard tanpa kebenaran pemegang harta intelek karya.
Google Malaysia mohon maaf atas kesilapan kadar pertukaran dolar AS-ringgit
Google berkata bahawa ia menyediakan kadar pertukaran mata wang hanya untuk tujuan maklumat sahaja.
Kerajaan minta penjelasan Google berhubung data kadar pertukaran ringgit tidak tepat - Fahmi
BNM memaklumkan bahawa ini kali kedua Google menerbitkan data kadar pertukaran US$/MYR yang tidak tepat tahun ini.
Jangan kongsi maklumat tidak tepat ringgit cecah RM4.98 - Fahmi
Orang ramai diingat supaya tidak berkongsi maklumat yang tidak pasti berhubung data tidak tepat mengenai kadar pertukaran ringgit mencecah RM4.98.
Tiga cara AI generatif akan ubah cara kita bekerja tahun ini
Penggunaan AI generatif dijangka memberi kesan cukup besar terhadap perniagaan kecil dan sederhana, syarikat besar dan pekerja freelance.