Google to acquire Motorola for $12.5 billion; aims to supercharge and protect Android


5 Aug 2011
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August 15th saw an Independence Day announcement of an unexpected kind, with Google declaring that it would be buying Motorola Mobility – a deal that will make it a major hardware player in the smartphone business, allow it to spearhead the course of Android handset development, and give it access to the wealth of patents the 82-year old company has developed and amassed in its long and chequered history.
The news of the deal comes not too long after Google lost out on the Nortel Patent Portfolio – an estimated 6,000 telecommunication and other patents which were finally acquired by a consortium of companies including Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony. The Google-Motorola acquisition is also seen as a way to bolster Google, the Android platform, and Android licensees against the numerous “anti-competitive patent attacks” that Apple and Microsoft have recently launched. Google would also be using Motorola's expertise in video and connectivity solutions to better its Google TV platform.
The implications of the deal are numerous, the biggest being Google’s possible alienation of its Android handset partners. Google’s CEO, Larry Page, was quick to point out however that Google would still be looking to maintain its relations with these partners – and that Motorola would not be given any sort of insider advantage compared to its Android rivals.
Larry Page insists that Android will remain an open platform, and that Motorola, will just be one more Android licensee. Motorola will be treated as a separate business. Motorola, of course, is no stranger to Android – having switched over exclusively to the operating system since 2008, and delivering the platform lead device for Honeycomb earlier this year with the Xoom tablet.
The acquisition – estimated at $12.5 billion, Google’s largest till date – will of course have to be cleared by regulatory bodies in the United States, and is expected to only be finalized by early 2012. That hasn’t stopped the ripples from spreading however, with stock prices of Motorola Mobility already rising.
Microsoft, developer of Windows Phone 7 – one of the biggest rivals to Android, iOS, and BlackBerry mobile operating systems – has also seen its stock prices shoot up, with market watchers sure that Google’s move would cause handset manufacturers like Samsung, LG, and HTC to concentrate on developing their WP7 lineups to reduce the number of eggs in the Android basket, and protect themselves from competition from the Google-Motorola team.
Many industry watchers also feel the Google-Motorola deal could very well give ailing Canadian smartphone manufacturer, RIM, a much-needed boost in the changing landscape of the smartphone world.
The Google-Motorola deal has echoes in the Nokia-Microsoft partnership, with a major software developer merging interests with a major manufacturer, but of course, the differences are numerous as well, with Google actually intending to buy out Motorola instead of partnering with it, and, with Motorola already a major Android manufacturer, unlike Nokia with Windows Phone 7.

Source : Digit magazine
Why Google had to buy Motorola
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