Google has announced a deal to acquire part of Taiwanese firm HTC Corp’s smartphone operations for about $1.1bn (£822m)..
The deal, however, will not involve the purchase of a direct stake and HTC will continue to run its remaining smartphone business..
Google has sought to beef up its hardware capability with deals and product launches, and last year hired Rick Osterloh, a former Motorola executive, to run its hardware division.
The search giant said in a statement;
“For Google, this agreement further reinforces its commitment to smartphones and overall investment in its emerging hardware business,”
HTC shares were on a trading halt on Thursday. HTC is a long-time partner of Google and manufactures the US firm’s latest Pixel smartphone.
The deal will see 2,000 HTC staff join the US internet giant and underlines Google’s broadening ambitions in smartphone production.
Google develops the Android operating system used in more than 80pc of the world’s smartphones but largely relies on manufacturers like Samsung, Huawei and HTC itself to make and sell its phones, unlike Apple, which controls the design and development of both software and hardware.
Last year it released the first Google-branded phone, the Pixel, which is manufactured by HTC, and is gearing up to release a new model next month, but having thousands of staff join the company will expand the venture. The Pixel has been well received but only produced in small quantities.
Of the 2,000 staff moving from HTC, roughly about a fifth of its workforce, many are already working on the Pixel. Google is also acquiring a licence for HTC intellectual property.