Google’s Deal to Acquire Part of HTC’s Smartphone Division has been Approved by Taiwan’s Investment Commission

Google’s Deal to Acquire Part of HTC’s Smartphone Division has been Approved by Taiwan’s Investment Commission

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HTC’s financials situation has been steadily declining — this is something you’ve probably read a hundred times by now, but it still bears repeating. At one time, the Taiwanese original equipment manufacturer (OEM) was the top Android smartphone maker. The first Android smartphone, the HTC Dream, was released by the company in collaboration with Google, and company also released the first Nexus smartphone through the Nexus One. Until 2011, HTC was on a successful path, as Android was helping elevate the brand to new heights.

However, HTC’s revenue started to decline past 2011, the year where it was overtaken by Samsung as the top Android smartphone manufacturer. Despite many innovations and market-firsts, such as full metal construction in smartphones, secondary cameras for depth-sensing, front-facing stereo speakers, and more, the company couldn’t correct its downward flow. Year after year, its smartphones failed to match sales expectations.

It didn’t help that HTC also made mistakes along the way. For many years, the company struggled with camera quality in its smartphones. In 2015, the company’s flagship One M9 failed on the market, as it was figuratively burnt by the Snapdragon 810. The company has failed to penetrate the budget and mid-range smartphone markets in important countries such as China and India, and its smartphone pricing has also been a sore spot that impaired its price competitiveness.

This year, the company released the U11 as its flagship with a 3D glass back and an aluminium frame, distancing itself from the unibody aluminium construction it arguably catapulted into the mainstream. While reports stated that the U11 was selling better than the HTC 10 and the One M9, HTC subsequently posted its lowest revenue in thirteen years. Then, Google opted to buy part of the company’s smartphone division for $1.1 billion.

In October, HTC’s Vice President stated that the deal was on track to be approved and closed early next year. Now, Taiwanese media has reported that Taiwan’s Investment Commission has approved Google’s deal to acquire part of HTC’s smartphone division. The deal is expected to close in the first half of 2018.

The Taiwanese company is expected to use a portion of the $1.1 billion in proceeds for VR development. This deal should also be reducing the impact the company suffered at the hands of increasingly tough competition in the smartphone market worldwide. In November, the company announced the flagship U11+ and the mid-range U11 Life.

HTC has posted a worrying decline in revenue in the months of October and November, and incurred a net loss in the third quarter of this year. The proceeds from the Google deal have the potential to improve the OEM’s bottom line next year, so we are waiting to see how it all turns out.


Via: HTC Source