Rumors said that Google would purchase HTC’s smartphone department – while that rumor turned out to be false, Google did actually buy part of HTC’s business.

Google and HTC has officially unveiled that they have reached a deal. The deal includes that Google will pay $1.1 billion in cash for some of HTC’s employees who have worked/ and are still working on Google’s Pixel devices. Google will also have access to HTC’s intellectual property.

What this means is that some HTC employees will now join Google to make the next generation Pixel devices. Google will also be able to use HTC’s manufacturing patents and designs for their future devices.

HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market. We’re excited and can’t wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware. – Rick Osterlog, Senior VP of Hardware at Google

This deal will supposedly help HTC to perfect its next generation of devices as well as to continue its already successful Vive VR headsets – as well as IoT, AR and of course AI.

As expected, the above sentence proves that HTC does not plan on exiting  the smartphone business, instead it aims to perfect their future devices and win more market share and hopefully generate more profits the losses.

What does this prove?

Well, it proves that Google certainly wants a slice of the smartphone market and is taking it really seriously. The company clearly wants to set-up a strong image with a strong brand in order to make perhaps the best stock Android smartphones. (which they already do – Pixel devices are the first to receive major Android updates as well as monthly security patches)

It also proves that Google wants to take on Apple by controlling not only the software for its devices, but also the hardware. This would ultimately end up in a more optimised Android device than ever before.

As it’s usually the case with these large deals, it’s still awaiting approval from the regulatory, but it’s expected to complete by early 2018.