HTC Corp (宏達電) yesterday said it has completed the divestment of its Pixel smartphone team to Alphabet Inc’s Google for US$1.1 billion, as the firm switches its focus to the virtual reality (VR) business.
The Taoyuan-based company said that chief operating officer David Chen (陳文俊) has left the company to lead a research and development team at Google.
The personnel adjustment took effect yesterday, HTC said in a statement filed with the Taiwan Stock Exchange.
“Today [yesterday] marks the beginning of an exciting new chapter at HTC as we continue to drive innovation in our branded smartphone and Vive virtual reality businesses,” HTC chairwoman and chief executive officer Cher Wang (王雪紅) said in a company statement.
The completion of the transaction enables HTC to develop a more focused branded smartphone business, the company said.
The deal was announced in September last year.
HTC will continue to build its VR ecosystem to grow its Vive business and invest in other emerging technologies, including the Internet of Things, augmented reality and artificial intelligence, it said.
Under its agreement with Google, about 2,000 members of the Pixel smartphone division joined the US tech giant.
The completion of the transaction will help Google expand its presence in the Asia-Pacific region and make Taipei its biggest research and development base in the region, Google hardware senior vice president Rick Osterloh said in a company blog yesterday.
Google would continue its deployment and investment in the hardware business, which is entering its third year, the company said.
HTC is expected to use the proceeds from the deal to improve its virtual reality business and cushion the losses in its smartphone operations, market analysts said.
However, because HTC’s hardware business has been one of its major revenue sources, the disposal of a chunk of those assets is likely to shrink its bottom line in the long run, they said.
The company’s relatively new virtual reality operations, an attempt at product diversification, account for only a fraction of its overall sales, analysts said.
In the third quarter of last year, HTC posted losses per share of NT$3.8, its 10th straight quarter of losses.
After the announcement, HTC shares yesterday rose 1.71 percent to close at NT$71.40 on the Taiwan Stock Exchange, which fell 1.29 percent to 11,076.78 points.
Additional reporting by CNA
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