HTC Corp (宏達電) yesterday announced that it is selling the research and development team that worked on the Pixel smartphone and its nonexclusive license for intellectual property to Google for US$1.1 billion in cash.
About 2,000 members of the “Power by HTC” team, which is nearly 50 percent of the Taiwanese firm’s more than 4,000 employees working on research and development, are to join the US tech giant under the agreement, HTC said.
The deal represents only a partial sale of HTC’s smartphone business, as it is to continue to produce handsets under its own brand.
Photo: Reuters
The agreement does not include HTC’s manufacturing assets, it said.
“The agreement is to ensure that HTC’s smartphone business can keep going. I believe it also benefits HTC’s talents and their families, as Google has a good track record for taking care of its employees,” HTC chairwoman and CEO Cher Wang (王雪紅) told a joint news conference with Google executives at HTC’s headquarters in New Taipei City’s Sindian District (新店).
HTC is working on the U11 Plus, which is expected to hit the market later this year, and is developing a premium model that is to be launched next year, Wang said.
Google senior vice president of hardware Rick Osterloh said the agreement with HTC adds a new page to Google’s presence in Taiwan and is to help it take “a big leap in building the core in consumer hardware development.”
“We did this agreement because we value the talents and experience that HTC has... Winning in the long run is the reason we inked the deal with HTC,” Osterloh said.
Google is still working out the details for a location in Taiwan for the team, he said.
Osterloh declined to disclose whether contracts with HTC employees affected by the deal would be permanent or short-term.
HTC chief financial officer Peter Shen (沈道邦) said it was necessary to shrink the company’s research and development team and to adjust its product strategy, as it has posted two years of consecutive net losses.
“Overall, the agreement will result in a 30 percent to 40 percent reduction in HTC’s operating expenses,” Shen told a news conference at the Taiwan Stock Exchange earlier yesterday.
The transaction is expected to be completed by early next year and the firm plans to use the US$1.1 billion to develop HTC-branded smartphones, as well as virtual reality, mixed reality, artificial intelligence and 5G connectivity technologies, he added.
HTC cumulative net losses reached NT$3.98 billion (US$131.75 million) in the first half of this year, compared with NT$5.67 billion in net losses over the same period last year, company data showed.
It reported revenue of NT$3 billion last month, the lowest monthly figure since HTC was listed on the Taiwan Stock Exchange in March 2002, the data showed.
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