Chances are by now you’ve heard Monday’s announcement from Google that it expects to acquire Motorola Mobility for $12.5 billion, pending approval from federal antitrust regulators.
Google said in its Aug. 15 press release that it plans to operate Motorola as a separate business, with CEO Larry Page backing that claim up in a blog post. “This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open,” Page said.
“I don’t know how they can say what it’s going to do,” said Jeff Tillett, a mobile learning strategist and evangelist with Float. “In the mind of other OEMs (original equipment manufacturers), it probably does change things.” Tillett said maybe Google won’t approach things differently, but other companies may reconsider their strategies when choosing an operating system. “What if Apple said you could put the iOS on an HTC device?” Tillett said Google may full well plan on operating Motorola as a separate entity, but a fluctuating market may mean the industry “maybe won’t change in ways we understand right now.”
For instance, Tillett said the acquisition could see the introduction of a third competitor in the mobile realm. Apple is already there with iOS, and Google could get there with Motorola. Tillett said there may be opportunities for Microsoft to work with other OEMs. “Maybe you’ll see the three come off strong and more competitive. Maybe the other ones could fade out,” he said. “Nobody knows that.”
While Google hasn’t explicitly said it, several reports assert Google is going to become a mobile company. “Philosophically,” Tillett said, “I think Google’s already a mobile company because we don’t access Google from just one location as it is.”
Google’s acquisition of Motorola may lead to stronger and more stable implementations of the Android platform and may reduce fragmentation of the OS, Tillett said. “It makes it easier to write better apps and helps us reduce costs of having to write multiple versions.”
Google may not limit itself exclusively to mobile. “Motorola is also a market leader in the home devices and video solutions business,” Page said. “With the transition to Internet Protocol, we are excited to work together with Motorola and the industry to support our partners and cooperate with them to accelerate innovation in this space.”
Erick Schonfeld of TechCrunch specifically mentioned Google may try to pump energy into creating set-top boxes. “I think everybody wants to go that route,” Tillett said. Our devices – microwaves, refrigerators, toasters, etc. – are very independent, he said, and the vision for the future is that things work together. “For instance, my iPad can control my home stereo and my TV. You could probably build some scenarios where you’re on your way home from work and you’re missing some TV show, and you want to record it. And you want to turn on the popcorn machine,” he added. “I think there’s a lot of opportunity to make our devices work better.”
Another important aspect of the acquisition is the intellectual property that comes with it. By buying Motorola Mobility, Google now has an additional 17,000 patents with somewhere north of 7,000 more pending. Tillett thinks the patent portfolio was a substantial part of the merger. “Behind the scenes, that always has to come into play,” he said. “That might be another one of those key differentiators.”
With Android on the rise, Google is making a move to protect itself during litigation from other companies such as Apple and Microsoft.
Google recently acquired more than 1,000 patents from IBM, according to the New York Times. The deal came after Apple and Microsoft led an alliance of tech companies to outbid Google and purchase 6,000 patents for $4.5 billion from Nortel Networks, a Canadian telecommunications maker that filed for bankruptcy in 2009.
It should be noted the Google/Motorola deal is not final. Assuming the acquisition passes antitrust regulation, it isn’t expected to close until late 2011 or early 2012. The New York Times reported that Google said during their Aug. 15 conference call that they were confident the deal would be approved since it would improve competition in the smartphone market.
While Google’s purchase of a major manufacturer is big news, it’s not the first time a deal of this magnitude has transpired. And it probably won’t be the last. “I don’t think we’re done merging in the mobile-telecom space,” Tillett said. “It’s an ever-changing, moving industry.”
Additional sources and reading:
Google Buys Motorola Mobility For $12.5B, Says “Android Will Stay Open”
Google-Motorola Deal: Implications on Smartphone Sector
Google, needing patents, buys Motorola wireless for $12.5 billion
Google’s Bid For Motorola Changes Mobile Landscape
Quotes from Android partners
What Google lost—and gained—by not buying Motorola in 2010
Why Google Bought Motorola
Why the Google-Motorola Deal Is About More Than Mobile Phones
Google-Motorola Deal Positive for Apple; iPhone Maker to Strike Back
