Tuesday, August 16, 2011

Google acquiring Motorola Mobility for $12.5bn


Both firms had just confirmed that Google will acquire Motorola Mobility for $12.5 billion. The official release says the deal will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing.

In other words, don't panic all you other OEMs. But you have to wonder how this might affects the giving out of Android platform goodies.

In the past, Google has been careful to share evenly first dibs on new OSs. HTC, Samsung and Moto have all taken their turns to be first to rush out devices based on an updated platform.

Will Google be so even-handed now?

The deal has to be great for Moto though, which endured a hideous period post-Razr and has been partly rehabilitated by Android in its native US, but less so in the rest of the world.

Android dominates U.S. smartphone ownership, representing 39 percent of the market as of June 2011 according to the latest Nielsen data. More than 150 million Android devices are active worldwide, with Android products available from 39 manufacturers and 231 carriers across 123 countries.

Motorola went all out on Android in 2008, embracing the platform as its sole operating system. The company now ships 11 percent of Android smartphones in Q2, but still made a loss.

Having been outbid in the recent sell-off of Nortel’s patent portfolio, Google was clearly willing to look elsewhere to build up its arsenal of IP and in the light of the growing number of IP legal disputes in the smartphone market; this move will put Google in a stronger position competitively.

Three important points to this deal :

1. Apple. This means war! Don’t doubt for a minute that Google is going after Apple’s lunch, directly competing with the iPhone with this move into hardware.

2. Patents. Google now has access to Motorola’s 17,000+ wireless-related patents. The word “patent” came up more than 25 times in this morning’s call, underscoring how much this deal helps Google protect itself from legal challenges from competitors.

3. Mobile computing. The buyout makes Google the owner of some of the most popular Droid smartphones, giving it a direct way to monetize it’s popular Android operating system.

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