Just a few months ago, Google and HTC announced a deal that would see HTC sell a big chunk of its phone division to Google for $1.1 billion. Today, Google announced that the deal has closed, and the HTC employees are officially joining Google.
For HTC, the deal is a big cash infusion at a time when the company is struggling financially. WIth HTC burning through about $75 million each quarter, Google’s money gives it over three years of money to burn at the current rate. The move should also cut costs for HTC: the 2,000 employees leaving for Google represent half of HTC’s R&D group and 20 percent of its 10,000 employees. HTC claims it will continue to compete in the smartphone market, even with this huge of a staff cut.
For Google, the deal will bolster the hardware group, which was formed in 2016 under former Motorola CEO Rick Osterloh. The Google Pixel, Pixel XL, and Pixel 2 smartphones were a collaboration between Google and HTC, and these 2,000 HTC employees are the ones that made up the Pixel team inside HTC. Bringing the team in-house should give Google more control over the smartphone design process, presumably bringing more unity to the Pixel line and deeper integration of hardware and software.
2017’s Pixel 2 and Pixel 2 XL were two very different smartphones, made by two different manufacturers (HTC and LG) with different sets of components. More unity would be good. Google still doesn’t have its own manufacturing facilities, but neither does Apple. With these extra engineering resources, Google can now presumably do the same thing Apple does, getting a contract manufacturer like Foxconn to build an in-house design.
Osterloh says the new employees also represent a big expansion in the Asia Pacific region, and Taipei is now the largest Google engineering site in the area.