HTC has confirmed a deal which will see a chunk of HTC's smartphone business and assets sold to the search giant for $1.1 billion (around £820 million), but which will see HTC continue to build own-branded smartphones.

That Google was interested in HTC's smartphone business came out earlier this month as HTC sought cash to stem massive and ongoing losses driven by its smartphone and tablet division and push more money into its Vive virtual reality arm. At the time it looked like HTC would split in two with Vive spun out as a separate entity and the smartphone division sold to the highest bidder, but the truth of the deal is more complex.

Under the terms of the deal as disclosed early this morning by HTC, Google is to pay $1.1 billion (around £820 million) in cash in exchange for a large chunk of HTC's smartphone employees, many of whom had already been working with Google on the Pixel device partnership. The deal will also see Google receive various HTC intellectual properties (IPs), but as a non-exclusive licence - meaning that we're not seeing the same asset-stripping as occurred when Google purchased Motorola Mobility.

'As a pioneer of the smartphone market, we are very proud of our history of innovation. Our unmatched smartphone value chain, including our IP portfolio, and world-class talent and system integration capabilities, have supported Google in bolstering the Android market,' claims Cher Wang, chair and chief executive of HTC. 'This agreement is a brilliant next step in our longstanding partnership, enabling Google to supercharge their hardware business while ensuring continued innovation within our HTC smartphone and Vive virtual reality businesses. We believe HTC is well positioned to maintain our rich legacy of innovation and realise the potential of a new generation of connected products and services.'

While previous rumours had suggested an exit from the smartphone market for HTC the company claims it is doing no such thing: The statement on the deal includes reference to the retention of in-house engineering talent 'currently working on the next flagship phone' to be sold under HTC's own brand - an interesting move, given the losses HTC's smartphone division has been suffering in a market all but sewn up by Samsung and Apple.

'HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market,' claims Rick Osterloh, senior vice president of hardware at Google. '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.'


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