Google Buys Pixel Phone Division from HTC in $1.1 Billion Deal

The Google Pixel smartphone and its “best camera ever” will soon be even more “Made by Google.” The search giant just announced that it would purchase the Pixel hardware division from Taiwan’s HTC in a $1.1 billion deal.

Prior to this deal, Google designed, developed, and marketed the Pixel phone while HTC was the contracted hardware manufacturer.

Reuters reports that this acquisition is an all-cash deal that will add another 2,000 employees to Google’s headcount, bringing a fifth of HTC’s total workforce in Taiwan into the Google fold.

As part of the deal, Google is also acquiring a non-exclusive license for HTC intellectual property — no manufacturing assets are included — and the two companies are planning to explore additional ways of teaming up in the future.

This is the second major smartphone business acquisition by Google in the past half decade. The company acquired Motorola Mobility for $12.5 billion in 2012 and failed to generate any notable products before selling it to Lenovo for $2.91 billion in 2014.

This big push into smartphone hardware could be a boon for the Google Pixel’s camera capabilities, especially when compared to Apple’s iPhone line. Back in July, former Google exec Vic Gundotra caused a stir by claiming that the iPhone 7 camera is years ahead of Android-powered cameras.

“It’s because when Samsung innovates with the underlying hardware (like a better camera) they have to convince Google to allow that innovation to be surfaced to other applications via the appropriate API,” Gundotra said. “That can take YEARS.

“Apple doesn’t have all these constraints. They innovate in the underlying hardware, and just simply update the software with their latest innovations (like portrait mode) and ship it.”

Perhaps by plunging deeper into the hardware side of this business, Google can help itself and other Android phone manufacturers close this gap Gundotra is referring to.