HTC's $1.1bn tie-up with Google stops short of outright takeover

Google also gets its hands on HTC's IP in a non-exclusive deal

Smartphone maker HTC has agreed a $1.1bn investment and cooperation deal with internet giant Google that will see HTC become Google's main provider of hardware.

The deal will even see some HTC personnel moving to join Google.

However, the agreement stops short of the rumoured takeover of HTC by Google, with HTC remaining a separate company.

They do, however, carry a long history. HTC manufactured the very first Android device, the HTC G1 (Dream) and before that, worked on early smartphone devices like the O2 XDA and Orange SPV, running Windows Mobile.

It's still early days for Google's hardware business

On 4 October, Google will unveil its 2017 range of ‘Made By Google' hardware, and all the evidence points to the Pixel 2 smartphone being made by HTC.

In a blog post, Rich Osterloh, Google's senior vice president for Hardware, wrote: "It's still early days for Google's hardware business.

"We're focused on building our core capabilities while creating a portfolio of products that offers people a unique yet delightful experience only made possible by bringing together the best of Google software - like the Google Assistant - with thoughtfully designed hardware.

"HTC has been a longtime partner and has created some of the most beautiful, high-end devices on the market. We can't wait to welcome members of the HTC team to join us on this journey."

Also included in the tie-up is a non-exclusive deal for HTC's intellectual property. This will leave HTC to produce its own handsets concurrently, while Google can leverage the technology in its Made By Google range.

This also brings the HTC Vive, the company's VR offering closer to the Google stable. The Vive has proved to be significantly more popular than recent smartphone offerings from the company, thanks to its launch tie-up with Valve Software, the company behind the popular Steam PC gaming portal.

Rumours of a takeover have been rife for weeks, reaching a head on Tuesday when HTC announced that shares would be suspended on the Taiwan Stock Exchange ahead of an announcement.

Google. meanwhile is expected to use its October 4th event to launch the HTC manufactured Pixel 2, a Pixel 2 XL made by LG, a mini version of the Google Home to rival the Amazon Echo Dot, and a "Pixelbook" running Chrome OS with Android app support.