Analysis: Google Buys Motorola Mobility

Google has announced that it has purchased Motorola Mobility for $12.5-billion or $40 a share. While that sounds like a hefty chunk of change, there are a few things to consider. First of all, Google can afford the purchase. Secondly, with all the ridiculous patent wars happening in tech, Motorola Mobility gives Google the opportunity to counter-sue and pursue cross-licensing deals with companies that claim Android infringes on their patents. Lastly, it’s just good business to have control of software, services, and hardware.

Google CEO Larry Page wrote the following on the Official Google Blog:

This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.

We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to “protect competition and innovation in the open source software community” and it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.

This deal is first and foremost about patents. Depending on which source you believe, either Motorola or Nokia holds the largest mobile-tech patent library. Technology patents are getting out of hand. Apple and Microsoft are pretty much suing everybody that makes a mobile device. It’s sad that Microsoft made more money off of Android than Windows Phones in Q2 2011. It’s also sad that Apple is able to block Samsung devices from being sold in certain countries over patent litigation. (I’ve never mistaken a Galaxy device for an iPhone or iPad, have you?) Acquiring Motorola Mobility gives Google a ton of ammo to defend and attack in the crazy patent wars.

Although Motorola has been getting beat up in the press in 2011 due to the underwhelming Xoom tablet and the comically delayed Bionic phone, it’s still one of the best Android handset makers in the world. Remember, Android didn’t really take off until the Motorola Droid/Milestone. The company has made excellent Android phones like the Droid X and Droid 2. It will be interesting to see if the number of Motorola handsets decreases after the acquisition is complete (I’m guessing it will). The acquisition also fuels the rumor that Motorola will be making the Android Ice Cream Sandwich hero phone, rumored to be called the Nexus prime.

Regardless of whether Motorola Mobility continues producing the same amount of phones, it’s important for Google to lead the way by showing how to integrate Android software, services, and hardware. Prior to the acquisition, Google only controlled the first two. Now it has a hardware manufacturer to play with. This can only be good for the future of Android.

Of course it will be interesting to see how Google’s Android partners react to the deal in the long term. Right now its partners are applauding it because of all the lovely patents. Google will have to juggle the advantages of having its own hardware arm and appeasing its hardware partners. Naturally, Motorola Mobility will have some advantages over HTC, Samsung, LG, etc., but will they be substantial enough to stifle the competition or will the competition be forced to be more aggressive with differentiation? For example, will HTC — one of the most successful Android partners — be even more aggressive with its Sense UI and HTC Watch video service in order to help its phones stand out from Motorola’s Google phones?

What do you think of Google’s acquisition of Motorola Mobility? How do you think it will affect the Android universe? Is Motorola now a shoe-in for the next Android champion phone and all future Android champion products? Leave a comment and let me know (please)!


Author: RPadTV

3 thoughts on “Analysis: Google Buys Motorola Mobility”

  1. I kinda am on Apple's boat with the tablet arguments. They are saying the tablet form factor is theirs. Hard to dispute that in some ways.

    As far as the story is concerned, good. Moto lost my interest when they purported that Blur was essential. I hope it shrinks the android market a bit.

  2. People used to ask me all the time if my Captivate was the new iPhone. I had 2 people ask me if my Dell Streak was an iPad (think they used it as a generic term though….hopefully anyway). A few people have asked if my Infuse 4G was the iPhone 4. People are dumb.

    I know they say they will run the companies differently, but don't you think there is a better chance for the Flagship Android phones to start coming from Motorola now.

    1. Page was insistent that bidding for the rights to make future Nexus phones will be the same….but I kind of doubt it. One interesting side effect will possibly being Google's partners making more of an effort to diversify to cover their bases. This is potentially a good thing for Windows Phone.

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