Alphabet Google struck a $1.1 bn (Â£822m) deal with Taiwan’s HTC has expanded its smartphone business.
Google is not a share in the company, but some of the HTC staff will giants of the Silicon Valley.
The Taiwanese company was once a major player in the smartphone market, but has struggled to compete with the likes of Apple and Samsung.
Google expects to close the deal by the beginning of 2018, provided that the all-clear from the regulatory authorities.
Shares of HTC were suspended in Taiwan on Thursday.
Betting on hardware
The deal is to increase the recent move by Google, their hardware capabilities.
“It is still early days for Google’s hardware business”, the company’s senior vice-president of hardware Rick Osterloh said in a blog post on the website of Google.
Under the deal, Google will have a team of people who develop Pixel smartphones for the US company and receive a non-exclusive license to HTC’s intellectual property. purchase
It builds on an existing partnership between the two tech companies.
“This is a future fellow Google employees are great people, we have already been working with exactly on the Pixel-smartphone-line,” Mr Osterloh said.
According to HTC, the half of its smartphone research and development team of over 2,000 people go on Google.
HTC produced for Google smartphones, the Pixel and Pixel XL. The society is the publication of the updated version of the devices in the next month.
Analysis – Dave Lee, BBC’s North America technology reporter, San Francisco
Yesterday, within just a few hours, most of the Apple-millions and millions of users were using the latest mobile operating system, with a tap on the prompt to download iOS 11.
Contrast experience on Android, where the company, the impressive and innovative updates are greatly hindered, because it takes months, sometimes years, for these functions to filter, users.
Google knows this separation between software and hardware is a massive problem. And so this strange deal with HTC, which in the case of the shortfall of the buy-out rumors, is about the solution of this problem. If there is a tight control over the most important premium devices, it may be ambitious with its software.
In some respects, this $1.1 billion deal is like a good friend, lending your pal a couple of pounds to tide you for a while. HTC Google needs the money to keep going. And Google needs HTC of know-how and production capacities, in order to remain competitive with their mobile devices.Offer
The deal marks Google’s second major foray into the smartphone manufacturing. In 2011, the Alphabet, then the name of Google’s Motorola Mobility it bought for $12.5 billion, only to sell it three years later.
Geoff Blaber of CCS Insight said while the HTC deal could “pull eyebrows high,” Google’s the story with Motorola, it will give the company valuable design and engineering resources.
“The far bigger risk for Google would be to stand by and do nothing, as the hardware becomes an important means to an end, to be the core business,” Mr, said Blaber.
But the big winner is HTC.
“It is a much-needed investment, as HTC is struggling to keep its smartphone business and grow their early start in virtual reality,” he added.
HTC Vive, the VR headset is favored by Google, as the alternative to Oculus Rift is owned by Facebook.
Vive outselling the Oculus Rift, with a margin of almost two to one, albeit with still modest numbers, is supposedly, and is recognized by many as the superior system.
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