Google buys HTC’s Pixel unit for $1.1bn

Alphabet’s Google said it would pay $1.1 billion for the division at Taiwan’s HTC that develops the US 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 atten-

The internet giant had purchased Motorola Mobility for $12.5bn in 2012. As Motorola failed to produce products that could compete with iPhones, it was sold to Lenovo Group for less than $3bn two years later

While Google won’t acquire any manufacturing assets from the latest all-cash deal, it plans to innovate its Android devices to compete with Apple’s iPhone series tion is largely focused on rival Apple.

“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,” sa- id 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 October 4 that are expected to include two Pixel phones and a Chromebook. Pixel smartphones, only launched a year ago, have less than 1% 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 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.