Google HTC Deal

Google officially closed its $1.1 billion deal with HTC Corp.,
adding more than 2,000 smartphone specialists in Taiwan
to help the search giant chase Apple Inc. in the cut-throat
premium handset market.

The deal will help Google design more of its own consumer
hardware and could set it up to wade deeper into special-
purpose chips -- like Apple. Google’s most recent Pixel
model came with a new image processor to improve the
device’s camera. More of this "custom silicon" will come
in the future, Google’s hardware chief Rick Osterloh said
in an interview.

Osterloh brought in HTC engineers and designers to help
Google control more of the design and production of its
products, including working more closely with suppliers.
Google previously focused on software and let manufacturers
including Samsung Electronics Co. and HTC handle the
hardware. But modern phones offer features like augmented
reality and artificial intelligence-based services that require
close integration of software and hardware.

"You have to be vertical in some cases to really push the
envelope for consumers," Osterloh said. "Our intention is to
invest in this for the long term. You’ll see a steady increase
in investment from us."

HTC said in a separate statement that it plans to proceed
with its next flagship smartphone and will focus its efforts
in the segment. “Today marks the beginning of an exciting
new chapter at HTC as we continue to drive innovation in
our branded smartphone and VIVE virtual reality businesses,”
Cher Wang, chairwoman at HTC said in the statement.