It was reported earlier in the month that Google was in the "final stage" of a deal to purchase HTC"s smartphone division. Over the past 24 hours, those rumors have gained a lot of traction, with reports that Google will purchase part of HTC"s smartphone operation for around $1 billion. Well, it turns out that Google will instead be paying HTC $1.1 billion in order to strengthen its own smartphone business by securing some of HTC"s talented team, along with non-exclusive licenses for the firm"s intellectual properties.
HTC was once a dominant force producing smartphones as an ODM (original design manufacturer) and eventually transitioning its business to become a successful OEM (original equipment manufacturer). While things were great for quite some time, things started to take a turn for the worst as other manufacturers began to gain market share. While the past few years have been fairly rough, things have started to looking up this year, with the more recently announced U11 passing its predecessors in sales numbers and the firm assisting Google in producing its Pixel and Pixel XL handsets last year.
As Google looks to get more serious about its own handsets and have better control over its manufacturing, it makes sense for the company to be interested in having a reliable alliance with a manufacturer that has been in the industry for close to two decades. The next few years should be quite interesting for both parties.