Google buys HTC smartphone team for $1.1B [u]

Posted:
in General Discussion edited September 2017
After HTC announced a coming halt to trading on the Taiwan Stock Exchange pending "material information" that could impact the stock's value, a move that sparked speculation of a takeover, Google on Wednesday confirmed plans to buy the firm's mobile division team for $1.1 billion.




Officially announced in a blog post penned by Google SVP of Hardware Rick Osterloh, the acquisition is in many ways an extension of Google's partnership with HTC that started with the HTC Dream, the first Android smartphone. HTC later collaborated with Google on the Nexus One, Nexus 9 tablet and, most recently, the Pixel smartphone line.

"With this agreement, a team of HTC talent will join Google as part of the hardware organization," Osterloh said. "These future fellow Googlers are amazing folks we've already been working with closely on the Pixel smartphone line, and we're excited to see what we can do together as one team."

Terms of the deal have not yet been disclosed beyond the $1.1 billion Google paid for the Powered by HTC team. Sources informed Reuters earlier today that the deal is worth around $1 billion, while figures cited by The Verge, which later reported Google is spending $1.1 billion on the mobile division assets.

In addition to adding members of HTC's smartphone team to its ranks, Google is netting a non-exclusive intellectual property license from the deal. What IP is covered under the acquisition's terms, or how much Google shelled out for it, is unclear.

At Google, the soon-to-be former HTC employees will be working on future "Made by Google" products. Introduced last year, the hardware lineup ranges from the HTC-built Pixel to the Google Home speaker accessory, Google Wifi mesh networking system, Daydream View VR headset and Chromecast Ultra media streamer. A second generation of Made by Google devices is slated for unveiling on Oct. 4.

Today's announcement validates in part rumors from earlier this month that claimed Google was eyeing an HTC takeover. At the time, reports said the internet search giant was looking to take a controlling interest in, or completely buying out, HTC's smartphone operation.

Google's latest high-profile buy in the smartphone space is reminiscent of its ill-fated 2012 purchase of Motorola Mobility. A $12.5 billion deal, Google invested substantial capital in the beleaguered manufacturer, but saw very little in the way of returns. In 2014, Motorola was ultimately sold off to Lenovo for $2.9 billion, though Google held on to a "vast majority" of the telecom's important patents.

Update: This story has been updated with correct acquisition figures.
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Comments

  • Reply 1 of 79
    sigh
    Avieshekanton zuykovRacerhomieXwatto_cobra
  • Reply 2 of 79
    Does this have any impact on the HTC Vive that supposed to be used for VR on the Mac?
    watto_cobra
  • Reply 3 of 79
    roakeroake Posts: 620member
    Ahahaha.  Ahahahhahhaa. Hahahahahaha!
    StrangeDaysAvieshekanton zuykovmagman1979[Deleted User]watto_cobra
  • Reply 4 of 79
    This will workout about as well as the Motorola purchase. /s
    edited September 2017 Avieshekmagman1979williamlondonspice-boyjbdragonwatto_cobra
  • Reply 5 of 79
    If they couldn't make Motorola work, how are they going to make HTC work?
    seandolibertyandfreestarwarsmacseekerfotoformatAviesheknetmagemagman1979williamlondonspice-boy
  • Reply 6 of 79
    sflocalsflocal Posts: 4,385member
    As others mentioned above... I give it 2 years, 3 tops before Google runs HTC into the ground, Motorola being a fine example of Google's incompetence. 
    Avieshekmagman1979SpamSandwichwilliamlondonlarryajbdragonlolliverwatto_cobrajony0
  • Reply 7 of 79
    Google needs to stick to software, not hardware.  Since the Motorola deal was an unmitigated disaster, I assume this acquisition is so they can establish a foothold in China
    Avieshekspice-boywatto_cobra
  • Reply 8 of 79
    I am not sure Motorola was such a bad deal for Google:

    - They sold Motorola to Lenovo for 2.9 billion (as the article correctly reports).
    - They also sold the cable modem and set-top box business to Arris for 2.35 billion in 2012.
    - Motorola had 3 billion in cash.

    So once you factor everything out (plus some tax assets apparently), it appears they lost not more than 3.5 billion on the deal. A nice article is here:

    http://bgr.com/2014/02/13/google-motorola-sale-interview-lenovo/

    So one view is that they paid about 3.5 billion for Motorola patents - which is less than Apple and Microsoft paid when they teamed up to buy Nortel patents for 4.5 billion.

    But more importantly, Motorola was about to sue other Android manufacturers (Samsung, HTC). Google appeared to buy Motorola to end that threat because Android was not yet the dominant alternative to iOS. If Motorola would have sued everyone else, it could have disrupted the whole eco-system.

    So I don't think Google regrets buying Motorola - it might have been a defensive move (getting more patents, prevent a patent war with other Android OEMs) but it wasn't hugely expensive in the end.


    edited September 2017 fotoformatOfercapnbobbirkogwydionlostkiwixzupatchythepirate
  • Reply 9 of 79
    This is confusing as HTC said they will still be selling HTC branded smartphones. We’re they just desperate for cash?
  • Reply 10 of 79
    When Google acquired Motorola, supposedly, they didn't "really try" to become an actual hardware player and essentially put up a virtual firewall between the companies as not to show special favor to Motorola over any other phone producing Android licensee.  Back then it was all about the Motorola patents Google believed would be useful to fend off Apple and Microsoft lawsuits.   Google partnered up with other companies with the Nexus brand often giving those other companies first access to new Android update features.  

    Now, I suppose it will be different. Google may really be "In it to Win it" this time...

    Microsoft now competes with their OEM Windows licensees' with Surface Hardware so...  it is what it is.   

    everyone really, really wants to be like Apple now. 
    jbdragonronnlostkiwiwatto_cobra
  • Reply 11 of 79
    tmaytmay Posts: 3,386member
    I am not sure Motorola was such a bad deal for Google:

    - They sold Motorola to Lenovo for 2.9 billion (as the article correctly reports).
    - They also sold the cable modem and set-top box business to Arris for 2.35 billion in 2012.
    - Motorola had 3 billion in cash.

    So once you factor everything out (plus some tax assets apparently), it appears they lost not more than 3.5 billion on the deal. A nice article is here:

    http://bgr.com/2014/02/13/google-motorola-sale-interview-lenovo/

    So one view is that they paid about 3.5 billion for Motorola patents - which is less than Apple and Microsoft paid when they teamed up to buy Nortel patents for 4.5 billion.

    But more importantly, Motorola was about to sue other Android manufacturers (Samsung, HTC). Google appeared to buy Motorola to end that threat because Android was not yet the dominant alternative to iOS. If Motorola would have sued everyone else, it could have disrupted the whole eco-system.

    So I don't think Google regrets buying Motorola - it might have been a defensive move (getting more patents, prevent a patent war with other Android OEMs) but it wasn't hugely expensive in the end.


    Incalculable lost opportunities for bpth Google and MS in the mobile phone industry, so yeah, it was a "bad deal". Google is still generating the bulk of its profits from advertising, very little from handsets.

    Since the iPhone was released, Apple has generated as much profit as Google and MS combined, and not all of that was from the iPhone. 

    https://qz.com/1045972/apple-aapl-has-made-as-much-as-microsoft-msft-and-alphabet-goog-combined-since-the-iphone-launched/

    http://www.asymco.com/2017/09/20/good-better-best/

    "Before the iPhones 8 and X launched I made a prediction on what the iPhone would cost. I concluded that the iPhone price would not change. This is because it has never changed[1]. Apple collected $767,758,000,000 for the 1,203,732,000 iPhones sold to the end of June or $ 637.8147 per phone."
    edited September 2017 williamlondonronnwatto_cobra
  • Reply 12 of 79
    I am not sure Motorola was such a bad deal for Google:

    - They sold Motorola to Lenovo for 2.9 billion (as the article correctly reports).
    - They also sold the cable modem and set-top box business to Arris for 2.35 billion in 2012.
    - Motorola had 3 billion in cash.

    So once you factor everything out (plus some tax assets apparently), it appears they lost not more than 3.5 billion on the deal. A nice article is here:

    http://bgr.com/2014/02/13/google-motorola-sale-interview-lenovo/

    So one view is that they paid about 3.5 billion for Motorola patents - which is less than Apple and Microsoft paid when they teamed up to buy Nortel patents for 4.5 billion.

    But more importantly, Motorola was about to sue other Android manufacturers (Samsung, HTC). Google appeared to buy Motorola to end that threat because Android was not yet the dominant alternative to iOS. If Motorola would have sued everyone else, it could have disrupted the whole eco-system.

    So I don't think Google regrets buying Motorola - it might have been a defensive move (getting more patents, prevent a patent war with other Android OEMs) but it wasn't hugely expensive in the end.


    I think you’re missing the point. The Motorola business was a failure under Google. Period.
    croprronnpatchythepiratewatto_cobra
  • Reply 13 of 79
    HTC was rapidly failing as a company, despite building Google's Pixel phones. Look what Google did with Nest, let alone Motorola. How is Samsung--already on edge with Google--going to want Google in control of Android? How is Google going to be better at hardware now that its original Andy Rubin Android team left for Essential? Motorola's patents didn't do anything for Google, regardless of what BGR claims was "not so bad". For less than $13 billion Google should have been able to build a hardware line from scratch, along with a silicon empire, a retail empire, an AR platform and a fashion headphones business. Apple did!
    capnbobmagman1979williamlondonMacProlkruppbrucemcronnlostkiwipatchythepiratelolliver
  • Reply 14 of 79
    Rayz2016Rayz2016 Posts: 4,555member
    Paging GoogleGospelGuy, paging GoogleGospelGuy…
    anton zuykovmagman1979pujones1StrangeDayswatto_cobra
  • Reply 15 of 79
    Rayz2016Rayz2016 Posts: 4,555member
    I am not sure Motorola was such a bad deal for Google:


    So once you factor everything out (plus some tax assets apparently), it appears they lost not more than 3.5 billion on the deal.




    Losing 3.5 billion is the very definition of a ‘bad deal’. 
    netmagemagman1979williamlondonStrangeDaysronnlostkiwilolliverwatto_cobra
  • Reply 16 of 79
    Rayz2016 said:
    I am not sure Motorola was such a bad deal for Google:


    So once you factor everything out (plus some tax assets apparently), it appears they lost not more than 3.5 billion on the deal.




    Losing 3.5 billion is the very definition of a ‘bad deal’. 
    They paid $3.5bn for the patents - seen as a fair market value at the time. It wasn’t a great deal but in preventing an all out war in android land and not losing much if any $s themselves it wasn’t a disaster.
  • Reply 17 of 79
    freerange said:
    I am not sure Motorola was such a bad deal for Google:

    - They sold Motorola to Lenovo for 2.9 billion (as the article correctly reports).
    - They also sold the cable modem and set-top box business to Arris for 2.35 billion in 2012.
    - Motorola had 3 billion in cash.

    So once you factor everything out (plus some tax assets apparently), it appears they lost not more than 3.5 billion on the deal. A nice article is here:

    http://bgr.com/2014/02/13/google-motorola-sale-interview-lenovo/

    So one view is that they paid about 3.5 billion for Motorola patents - which is less than Apple and Microsoft paid when they teamed up to buy Nortel patents for 4.5 billion.

    But more importantly, Motorola was about to sue other Android manufacturers (Samsung, HTC). Google appeared to buy Motorola to end that threat because Android was not yet the dominant alternative to iOS. If Motorola would have sued everyone else, it could have disrupted the whole eco-system.

    So I don't think Google regrets buying Motorola - it might have been a defensive move (getting more patents, prevent a patent war with other Android OEMs) but it wasn't hugely expensive in the end.


    I think you’re missing the point. The Motorola business was a failure under Google. Period.
    That wasn’t the point at all. Being an awesome hardware company was not Google’s primary objective and it wasn't a financial disaster. Let’s face it, no one has done well at being an awesome Android manufacturer. Samsung is hanging in there at 2014 levels, every one else seems to be loss making or niche or low end. This deal is another case of Google bailing out another part of its HW ecosystem with spare change from the sofa cushions. They will add it to their rag tag HW assets that ar
  • Reply 18 of 79
    ...They will add it to their rag tag HW assets that are mostly there to push the HW side of whatever advances their advertising and data acquisition ecosystem along.
    mike54williamlondonlkrupplostkiwi
  • Reply 19 of 79
    freerange said:
    I am not sure Motorola was such a bad deal for Google:

    - They sold Motorola to Lenovo for 2.9 billion (as the article correctly reports).
    - They also sold the cable modem and set-top box business to Arris for 2.35 billion in 2012.
    - Motorola had 3 billion in cash.

    So once you factor everything out (plus some tax assets apparently), it appears they lost not more than 3.5 billion on the deal. A nice article is here:

    http://bgr.com/2014/02/13/google-motorola-sale-interview-lenovo/

    So one view is that they paid about 3.5 billion for Motorola patents - which is less than Apple and Microsoft paid when they teamed up to buy Nortel patents for 4.5 billion.

    But more importantly, Motorola was about to sue other Android manufacturers (Samsung, HTC). Google appeared to buy Motorola to end that threat because Android was not yet the dominant alternative to iOS. If Motorola would have sued everyone else, it could have disrupted the whole eco-system.

    So I don't think Google regrets buying Motorola - it might have been a defensive move (getting more patents, prevent a patent war with other Android OEMs) but it wasn't hugely expensive in the end.


    I think you’re missing the point. The Motorola business was a failure under Google. Period.
    Motorola was already a failure before Google bought it. That's why it was being carved up and sold. Google arguably dragged it into the modern era with the Moto X. Was it and is it now a financial success? Perhaps not. Did it kick off a nice mid market of quality value Android phones? Yes.
    watto_cobra
  • Reply 20 of 79
    Sad end to HTC - the little engine that couldn't. 

    watto_cobra
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