Following a dire financial performance in August, resulting in the manufacturer's lowest monthly revenue figures in 13 years, the Taiwanese press is reporting that HTC is in the "final stage" of talks with Google around a possible sale of the former's struggling smartphone business.

Digitimes reports that demand for the flagship HTC U11 peaked in July, followed by a "sharp decline" in U11 sales in August. During that month, HTC brought in just NT$3 billion ($99.69 million), a decline of 51.5% from July 2017, and 54.4% from August 2016.

The outlet cites Chinese-language publication Commercial Times, which says HTC is in the "final stage of negotiation with Google for selling its smartphone business unit." The deal may involve a straight buyout of HTC's smartphone biz, or Google becoming a "strategic partner" for HTC. However, it's unclear what that might involve, given the close partnership that already exists between the two around Android, Pixel and other projects — a strategic investment in the company is one likely possibility. The deal will be concluded by the end of the year at the latest, the report claims.

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Any deal would reportedly not involve Vive, HTC's VR effort, which is a separate business unit.

Two options are reportedly on the table: a strategic partnership, or a straight-up buyout.

This isn't the first we've heard of a possible sale ahead for HTC, as the company's phone business continues to flounder despite new products like the U11 being generally well-received. A report from Bloomberg in recent weeks has suggested strategic changes and business unit spin-offs are on the table.

A sale to Google, if it happens, would be huge news, just as Google's short-lived acquisition of Motorola was back in 2012. The Google of 2017, however, would be better positioned to absorb HTC into its burgeoning hardware division, and HTC's manufacturing base and infrastructure could be refocused to serve Google's own-branded smartphone and tablet ambitions. Several reports have pointed to HTC as the manufacturer of one of two 2017 Pixel phones coming later this year. (AC understands that the rumors are true, and that HTC will indeed make the smaller device this year.) So HTC will continue to pump out Pixels regardless. But it's not clear what might happen to the HTC brand, or the company's own product lineup, should the rumored Google acquisition come to pass.

It's a fascinating possibility, but as with any rumor from a single outlet, this report should be taken with a hefty pinch of salt for the moment.

An HTC spokesperson declined to comment on the report.



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