HTC produced the very first Android phone in 2008, and it went on to become one of the most prominent makers of Android devices as the platform grew. However, it's been years since the Taiwanese company had a hit. As financial losses continue to mount, there are new rumors that Google is nearing a deal to acquire HTC's smartphone division.
According to the Chinese-language Commercial Times, Google and HTC are in the "final stage" of negotiations that could result in Google rescuing the smartphone maker. Google is supposedly looking at two options—either acquiring the smartphone business outright or becoming a strategic partner for HTC's smartphones. The Vive virtual reality unit is not part of the negotiations and will remain a separate entity regardless of what happens.
The Google deal is completely unconfirmed, but HTC's dire financial situation is a matter of public record. Its August revenues are the lowest they've been in 13 years and more than 50% down from last year at this time. This comes just a few months after the launch of the HTC U11, which was supposed to turn HTC's fortunes around. However, DigiTimes claims demand for the phone has already waned, so things may only get worse from here.
Google famously came to the rescue in 2011 when Motorola was in a similar state. It held on to the company for several years, overseeing a revamp of Moto's product lineup before selling it off to Lenovo for much less than it paid (Google kept the patents, though). Maybe HTC is destined for a similar fate, and Google's work with HTC to produce the first-generation Pixel phones would make this a good match. HTC is also expected to make one of this year's Pixel devices, so Google has an interest in making sure the company stays afloat.
Regardless of whether or not this report is true, HTC's financial data paints a bleak picture. If Google doesn't step in, someone else will.