This morning, Google announced an agreement in which it would acquire Motorola Mobility for a total of $12.5 billion to “supercharge the Android ecosystem.” For those not familiar, Motorola split into to companies earlier this year in January: Motorola Mobility and Motorola Solutions. According to the press release, Google intends to run the newly acquired Motorola Mobilty as an independent business and the company plans to keep Android open. The transaction may not occur until early 2012.
“Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.” — Larry Page, Google CEO.
Android first made a debut in late 2007. According to the Google Blog, there are over 150 million devices in use with over 550k new activations each day. There are 39 manufacturers making Android devices for 231 carriers in 123 countries. I would not be surprised to see a Motorola-built Nexus 3 smart phone and tablet within a few months. HTC built the original Nexus One while the Samsung was behind the Nexus S we recently reviewed.
While Motorola did away with the MotoBlur branding due to poor reception among consumers, it has definitely improved in recent times as we have seen on devices such as the Droid X2 and the Droid 3. With that being said, it is unclear whether Google will do away with Motorola customizations.
Despite being a software company for ages, it is interesting to see Google jump into the consumer hardware market as well. This acquisition will definitely brush up against Apple’s thriving model which traditionally sells a hardware running on its own software.
Google’s true motive to acquire Motorola Mobility is almost definitely patents. Apple, Microsoft, and RIM recently won an auction bid to secure about 6,000 patents from Nortel Networks for about $4.5 billion. Google was definitely unhappy as it lost the bid and choose to point out that the U.S. Department of Justice is evaluating the Nortel transaction to ensure it will not harm competition or innovation in the open source community. While Google is quitely pushing for headline favorable to its business intrests, I should note that the acquisition of Motorola Mobility rakes in nearly 17,000 patents for them not to mention another 7,000 pending patents.
Relationships between handset manufacturers and Google is also a major concern as this transaction with Motorola Mobilty closes. Companies such as HTC, LG, and Samsung might feel undercut with access to the Android platform with Google potentially giving priority to its own Motorola Mobilty hardware division. Despite those partnerships potentially going downhill in the future, executives from the largest Android manufacturers issued the following statements:
“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.” said Peter Chou, CEO, HTC Corp
“We welcome Google‘s commitment to defending Android and its partners.” said Jong-Seok Park, Ph.D, President & CEO, LG Electronics Mobile
“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 is definitely interesting to see where things go from here. I am curious whether having a hardware business will distract Google from focusing on Android or whether it will give the platform a true boost. I also would not be surprised to see Motorola Mobility fall apart in a matter of time with Google simply carrying along with valuable patents — though I hope that does not happen. Regardless, it is humorous to see Google go from complaining about Android potentially becoming a victim of the patents held by competitors to now having some leverage of its own.