Taiwan’s Investment Commission approved a deal for search giant Google to acquire HTC’s R&D team, which develops the Pixel smartphones, for $1.1 billion.
The transaction is expected to be completed in Q1 2018, with Taiwan-based HTC forecast to net more than TWD30 billion ($1 billion) in profit in the quarter. The sum will help improve the vendor’s bottom-line after it reported heavy losses over the past two and a half years, a source told Taipei Times.
HTC reported a Q3 loss of TWD3.1 billion compared with a loss of TWD1.8 billion in the same quarter of 2016. Revenue of TWD15.7 billion was down from TWD22.2 billion.
Under the terms of the agreement with Google half of HTC’s R&D team of 4,000 will join the US company. The deal does not give Google access to HTC’s Vive VR business.
HTC is expected to focus on the VR software and hardware market. Its new Vive Focus was announced in Beijing in November and already racked up TWD4.5 billion worth of orders in China, Taiwan News reported. The Vive line was developed jointly by HTC and US video game supplier Valve.
Once a prominent player in the smartphone market, HTC struggled to compete with market leaders Samsung and Apple in recent years, and the situation reportedly was worsened by slowing sales of its most recent flagship – the U11 smartphone.
For Google, the deal will further step up its ambitions in smartphone hardware after it launched its Pixel devices in 2016.