Taiwan’s HTC announces sale of a smartphone unit to Google

TAIPEI (Taiwan News) - Taiwanese smartphone and virtual reality device maker HTC confirmed a deal to sell a smartphone team for US$1.1 billion to bolster Google's nascent hardware business.

The rumors about HTC’s possible acquisition by the U.S. internet giant have been around since August, with its virtual reality device unit reportedly likely to be traded. On Thursday, the company announced a deal to sell a smartphone unit, which designs and manufactures Google's Pixel device, for US$1.1 billion (NT$33 billion). The deal is expected to be completed in 2018.

HTC Chief Financial Officer Peter Shan (沈道邦) said the deal includes a non-exclusive licensing agreement for HTC intellectual property.

Shares of the company have fallen more than 12 percent this year, and were suspended for trading on Thursday due to the announcement.

The partnership between HTC and Google in manufacturing smartphones has been in place for ten years, laying a foundation for the deal. The sale is said to allow HTC to focus on sustaining innovation efforts in virtual reality ecosystem, Internet of Things, augmented reality and artificial intelligence, according to the company statement.

The gadgets are considered part of Google’s strategic push to distribute critical software products, such as its voice-enabled assistant, and better compete with Apple Inc., according to Bloomberg.

People familiar with the matter were quoted by Apple Daily as saying that the California-based company has set up a Google Team at HTC’s headquarters in the Xindian district of New Taipei City, and around a hundred R&D engineers involved in building Google Pixel will be sent to the new department as contract employees.