What does Google gain from its Motarola deal?
In its largest ever acquisition, Google has announced that it will buy Motarola Mobility, the tech giant’s phone division, for a massive $12.5bn, launching the global search leader into the mobile handset market at mach 5 and surely shaking up the Android ecosystem almost beyond belief.
The deal is yet to win competition approval, which may not be entirely plain sailing, and brings Google into direct competition with the raft of handset manufacturers that licence the Android OS, providing the company with a tangible vehicles for a very real thrust into the device manufacturing market.
However, many have speculated that the real motivation for the deal may lay somewhere within Motarola’s mighty cache of IP, 17,000 patents and 7,500 pending patents; as rivals like Apple and Microsoft queue up to sue Google and each other over patent infringement, seeking to extract license fees and generally make mischief.
Google will pay $40 a share in cash for Motorola, a 63 percent premium on the company's closing stock price on Friday in what is being viewed by analysts as a typically aggressive move.
Google CEO Larry Page said the deal would ‘supercharge’ the Android OS, and give it the ability to move beyond smartphones. Motarola is a manufacturer of smart TVs, and potentially a snug fit for Google’s underperforming Google TV business.
The company was quick to point out that Android would remain an open source platform, looking to dampen concerns that it might abuse its dominant, and now ‘supercharged’ position; emphasising the intention for its acquisition to remain a separate entity.
"Our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community," said Andy Rubin, senior vice president of mobile at Google. "We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices."
While not all analysts remain convinced that these assurances will be proven over time, Google released a very interesting page listing a number of reaction comments from its partners.
“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem," said J.K. Shin, President, Samsung, Mobile Communications Division.
It remains to be seen how Android partners like Sony Ericsson, HTC, LG and Huawei will react now it appears the Google has its own preferred handset partner.
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