Google buys a big chunk of HTC's smartphone business

The rumors are (mostly) true: Google is buying a part of HTC to beef up its hardware business.

Google announced the agreement late Wednesday. Senior Vice President of Hardware Rick Osterloh wrote in a blog post that a "team of HTC talent" would join Google's hardware team, along with a non-exclusive license for some of HTC's intellectual property.

The deal is less dramatic than what was expected by many -- that Google would buy HTC's entire smartphone business in a long-term bid to go toe-to-toe with Apple in the smartphone market -- but it does show Google felt it needed more direct control over hardware assets to be more nimble competitor.

Financial terms of the deal weren't initially disclosed, but a Reuters report that broke just before the deal was announced said Google paid about $1 billion. By comparison, when Google acquired the entirety of Motorola Mobility in 2011, it paid $12.5 billion. (Update: In a statement, HTC said Google paid HTC $1.1 billion in cash as "part" of the transaction.)

HTC, which has struggled financially in recent years as its influence in the smartphone market has dwindled, sent out a tweet shortly after the announcement proclaiming it's "here to stay."

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Google's Osterloh said the people leaving HTC were already working with Google on the Pixel smartphones, and that the second generation of Made by Google products -- including the Pixel, Google Home, Chromecast, and Daydream View -- would be revealed at the company's upcoming Oct. 4 event in San Francisco.