Google acquires Motorola Mobility

Yesterday Google announced the acquisition of Motorola Mobility for $40 a share which gives a total of $12.5 billion which represents a premium of 63% over the closing price on August 12. The agreement was already approved by the boards of both companies.

A few months ago Motorola has taken steps to split into two independent publicly traded companies: Motorola Mobility and Motorola Solutions. Motorola Mobility is the company that focuses on manufacturing mobile phones and accessories as well as tablets and offering solutions for connectivity.

So far, Google’s participation in the market of mobile devices had been indirect, through its Android operating system. With the purchase of Motorola Mobility, Google will be able to produce smartphones and tablets with the desired features to fully take advantage of Android’s developments. From this point of view, now Google is at the same level as its competitor Apple.

In the press release it was stated that Google Android will still be an open operating system and Motorola Mobility will be run as a separate company that will be only an Android licensee.

To fully understand the importance of this acquisition you should note that Motorola Mobility owns approximately 17,000 patents and 7,000 more patent applications. Thus, after buying more than 1,000 patents from IBM, Google has continued to get stronger from this point of view.

[ad name=”AmazonAndroid”]

In the fierce patents war that now sees several telecommunications companies clash in courts around the world, getting their hands on no less than 17,000 patents with the possibility that a few thousand more might be approved is a huge deal. It’s not coincidence that Google CEO Larry Page stated that the acquisition of Motorola Mobility will allow his company to improve its defense from attacks coming from Microsoft, Apple and other competitors.

Until recently Google had a limited patent portfolio but now the company has a big arsenal, therefore the acquisition of Motorola Mobility could significantly shift the balance of power with its competitors.

As for the Android smartphone manufacturers, positive reactions came from some of them. For example, according to the CEO of HTC, one of the companies most involved in the patents war against Apple, Google’s move shows that the company is deeply committed to the defense of Android and its partners. Similar statements arrived from Samsung, LG and Sony Ericsson.

So far however no statements have been released concerning the possible changes in the relationship between Google and the other Android smartphone manufacturers. Will it be really possible to prevent Motorola Mobility from having an advantage over them?

The acquisition of Motorola Mobility by Google certainly shifts the balance in the world of mobile phones. The long-term repercussions are to be assessed, also to see if there will be any collateral damage for Google’s partners.

Leave a Reply

Your email address will not be published. Required fields are marked *