Smartphone manufacturer HTC is halting trading of its shares from Thursday as rumours suggest it is about to be acquired by Google.
The Taiwanese company, which is traded on the Taiwanese Stock Exchange (TWSE), once dominated the smartphone market but now retains only a 2% market share.
A TWSE statement said: “Trading in the shares of HTC Corporation and the securities underlying the company will be halted starting from 21 September 2017 pending the release of material information.”
Reports suggest that an acquisition by Google’s parent company Alphabet could be on the cards for HTC.
HTC shares closed on Wednesday’s trading 2.5% up from where they were before, leaving the company with a market cap of $1.9bn (£1.4bn).
Google has been pushing its new Pixel phone as an increasing number of people are using its services with mobile devices.
The technology giant has announced it will host a live event at the beginning of October, where new versions of the firm’s Pixel and Pixel XL will be unveiled.
While previously just a software company, the move may show Google’s commitment to developing its own hardware for users accessing its services.
At the same time, Google is developing services, including those running on artificial intelligence technologies, which work well on existing consumer hardware.
Image: Google is developing the Pixel phone as more people use its services on mobile devices
:: Why would Google buy HTC?
Speaking to Sky News, Gartner analyst Annette Zimmermann said: “This is different than when Google bought Motorola – they were after the patents then.”
Google bought Motorola for $12.5bn (£7.54bn) in 2014 as a way of boosting its Android operating system.
It subsequently sold Motorola on to Lenovo without those patents in a $2.9bn (£1.75bn) deal.
“HTC doesn’t have any important patents,” Gartner’s research vice president for personal technologies said.
Not only is the company “losing money… their R&D strength is by far not anywhere near what it was two to three years ago when 30% of their workforce was in R&D.”
The smartphone manufacturer’s “business and workforce has shrunk dramatically” since then, said Ms Zimmermann.
Although the company is not bankrupt and could continue to burn cash for a while, it doesn’t offer Google either intellectual property nor the prospect of additional revenue.
“Hence there is not much value to get apart from building up their own hardware business to get the hardware, software, experience and AI all optimised,” said Ms Zimmermann.
Source: Sky News