Zacks Investment Research | Sep 20, 2017 11:16PM ET
Alphabet Inc.’s (NASDAQ:GOOGL) subsidiary Google is paying $1.1 billion to its longtime partner HTC Corporation for a team of its engineers and a non-exclusive license for HTC intellectual property (IP).
Many of the HTC employees moving to Google are engineering minds behind Google’s Pixel smartphone. Though none of the companies disclosed the size of the team, Bloomberg reported it to be around 2,000.
Rick Osterloh, senior vice president of Hardware at Google, stated in a blog post, “A team of HTC talent will join Google as part of the hardware organization.”
We observe that Alphabet has gained 19.6% year to date, outperforming the S&P 500’s rally of 11.9%.
There are plenty of angles to analyze in this deal.
Google’s Increased Appetite for Hardware
Google has been active on the hardware front with devices like Pixel phones and voice controlled speaker.
So, it appears that the new move is an attempt to ramp up phone making as well as other product development in the consumer hardware space by integrating its technological expertise with HTC’s AR/VR, IoT and AI capabilities.
This could help Google to have an edge over rivals like rivals like Microsoft (NASDAQ:MSFT) , Facebook (NASDAQ:FB) and Amazon (NASDAQ:AMZN) who are increasingly trying to boost their stake in these areas.
Alphabet Inc. Net Income (TTM)
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