Google closed its $1.1 billion acquisition of a portion of HTC's smartphone division, bringing about 2,000 engineers and designers into the fold.
With the move, Google has set its sights on chasing Apple and the iPhone in the premium smartphone market. However, it remains to be seen whether the acquisition will indeed pay off.
Google Welcomes 2,000 HTC Engineers To The Fold
In a blog post, Senior VP for Hardware Rick Osterloh announced that the company has closed its deal with HTC, and welcomed about 2,000 engineers into Google. According to Osterloh, this is the same team that worked with Google for the development of the Pixel and Pixel 2 smartphones.
Osterloh also said that with the addition of the 2,000 engineers from HTC, Taiwan becomes the company's largest engineering site in the Asia Pacific region. The new Googlers will help design more consumer hardware, and eventually lead to Google making its own chips like Apple.
Qualcomm currently provides the system-on-chips for most Android smartphone manufacturers, and Osterloh said that Google will work with the supplier for the foreseeable future. However, a plan for Google to design and manufacture its own chips is certainly in the company's long-term plans.
For now, the obvious application for the influx of talent into Google would be on its Pixel smartphones, especially since the new Googlers are familiar with the devices. This represents a major expansion of Google's initiatives into hardware, but also poses as an additional challenge for high-end Android smartphone manufacturers. Companies are already having a hard time going up against Apple's iPhone in the high-end smartphone market, but now, they will also have Google as a competitor.
Osterloh, however, noted that other Android device manufacturers "know why we're doing this," he said. "Quite honestly, Apple is doing really well in developed markets."
To better compete with the iPhone, Google will need to replicate the hardware and software integration of Apple. With 2,000 HTC engineers on board, it may well be on its way to achieving that.
What's Next For HTC?
The deal between the two companies does not only benefit Google though, as it also provides HTC with an influx of cash at a time when it is financially struggling.
HTC will proceed with the development and launch of its next flagship smartphone, perhaps because it is too far along to be canceled. The company's plan after that remains unclear, but with the success of its Vive VR business, HTC may shift its focus entirely to the virtual reality industry.