Google is buying HTC's smartphone team for $1.1bn

In a bid to further boost its hardware business, Google has signed a $1.1 billion deal to acquire a team of HTC employees, many of whom have worked with the company on its Pixel smartphone. As part of the agreement, Google will also receive a non-exclusive license for HTC’s intellectual property.

According to HTC's CFO Peter Shen, this will mean about half of the 4,000 people in his company's R&D team will be joining Google, but he emphasized that HTC will continue developing its own range of smartphones, including its next flagship product.

HTC had partnered Google to build a number of devices including the Pixel smartphone. It also built the last Nexus, the 6P, before Google took over design duties for its own smartphone hardware.

“HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market,” said Rick Osterloh, Senior Vice President of Hardware at Google, in a released statement. “We’re excited and can’t wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware.”

The deal marks Google’s second major foray into smartphone manufacturing. It purchased Motorola Mobility for $12.5 billion in 2012 and sold it off to China’s Lenovo for less than $3 billion two years later. The deal with HTC is also important as it could bring Google closer to achieving the hardware-software synergy that has worked so well for Apple and the iPhone.

HTC, which once sold as one among the top ten smartphones globally, has seen its market share fall abysmally with the rise of top rivals like Apple, Samsung as well as other Chinese rivals.