HTC has been in major financial troubles and August was their worst month ever. There was a panic in the company and it was widely expected that Google would bail them out. With this $1.1 Bn deal, the company is bound to benefit.
The Deal:
This is agreement between the companies is being called as a ‘cooperation agreement’. As per the deal, HTC will continue making smartphones under their brand name but the team that worked on the Pixel smartphones now belongs to Google. This announcement comes out just weeks before Google launches the Pixel 2. Google and HTC share quite a history as the first ever Android smartphone was built by the Taiwan base firm. Since then the two have collaborated on a number of projects. Google says that this deal will help them improve upon product innovation. What is rather odd is that Google has only acquired the Pixel team and some Intellectual Properties from the company and no manufacturing unit has been acquired.
HTC’s Plans for the Future:
The $1.1 Billion deal between the two companies is fully in cash and is expected to close by early 2018. Around 2000 people are expected to join Google as a part of this deal. Caught in a storm, HTC isn’t looking forward to back down any time soon as the company is now reportedly working on a new flagship device. Moreover, moving forward the company is expected to double down their efforts on the Vive VR division. Had Google not bailed them out, the company was looking forward to sell off the Vive division – which would have been rather tragic considering how it was one of their favorite projects.
The Power Equations: Was The Deal Worth It?
While we have stated the facts out, personally it feels like HTC is still at a loss here. For a company which has been playing on the back-foot for about 2 years now, it’s hard to believe that $1.1 Billion would help HTC for more than a couple of years unless a miracle happens in-between.
Google’s association with the company over the last two years had primarily been over the Pixel smartphones. Now that the Pixel team has gone over to Google, the company has no real reason to care about HTC. While it will be unfair to call this a win-lose agreement where one party is benefiting while the other isn’t, Google has clearly taken the cream of the crop away from HTC. It would be interesting to see where the company goes from here. What are your views on this deal between the two? Do you think this deal will legitimately benefit HTC? Comment below and let us know! Source: Google
