Thursday, August 18, 2011

Google acquires Motorola Mobility for $12.5 billion, our take on the mega deal

In a mega deal that rocked the tech world Monday morning, Google announced that it was acquiring Motorola Mobility for a mind boggling $12.5 billion. After the announcement, the tech bloggosphere was a buzz with theories on what the acquisition means to Android. We have our own opinions here at Android Bugle, check them out after the jump.

First off, many industry followers have broken up into two camps. On one side many believe that Google was looking to simply bolster its relatively weak mobile patent portfolio to protect Android OEMs from the constant assault of anti-competitive patent attacks. While on the other side many believe that Google is looking to become a more vertically aligned company like Apple.

The entire story will only unravel itself with time but here's our thoughts on the deal that reshaped the mobile industry. From the beginning, Android is the result of the work from the Open Handset Alliance. For Google, to become a vertically aligned company that has top to bottom control of their product (like Apple and its iPhone) Motorola Mobility would be converted into the equivalent Foxconn/Pegatron of Apple.

It would be a shame for the company that pretty much invented the cell phone to be relegated to such a minor role, but more importantly this would without a shadow of a doubt alienate Google top OEM partners like Samsung, HTC, LG and Sony Ericsson.

Android from the beginning was committed to offering a software experience that would aim to please the unique needs of the masses. I firmly believe you cannot emulate the variety (and thus the success) of Android phones available today with only one manufacturer and to quote Andy Rubin, the brainchild behind Android, he seems to share that vision.

We have the Nexus program and the lead device strategy. What we do is we select an OEM around Christmastime of each year -- a chip company, everything else -- and they all huddle together in one building, and around the holidays a new device pops out. That won't change, Moto will be a separate business and part of that bidding process.

The treasure trove of patents held by Motorola, which was possibly going to be used against competitor OEMs like Samsung and HTC is now going to be used to protect all Android OEMs. I believe this to be the prime motivator to the acquisition.

Many believe the reason that Google acquired Motorola Mobility rather than license the patents is that Motorola backed Google into a corner where they threatened to sue other Android OEMs using their patent muscle and possible talk to Microsoft about being acquired by them.

In the end, I believe it was a great day for all of Android, including other manufacturers and is reflected by the quotes of several Android manufacturers:

“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.”
– J.K. Shin
President, Samsung, Mobile Communications Division 
“I welcome Google‘s commitment to defending Android and its partners.”
– Bert Nordberg
President & CEO, Sony Ericsson 
“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”
– Peter Chou
CEO, HTC Corp. 
“We welcome Google‘s commitment to defending Android and its partners.”
– Jong-Seok Park, Ph.D
President & CEO, LG Electronics Mobile Communications Company 
“We are positive towards Google’s continued commitment and investment in an open Android for the benefit of all players in the ecosystem.”
– Weili Dai
Co-founder, Marvell Technology Group 
“Best Buy has worked closely with both Google and Motorola to bring great solutions to our customers. Now, with today’s news, we are excited to see what we can do together to serve consumers. Both companies have been tremendous partners to Best Buy and we expect that connection to get even stronger in the future.”
– Brian J. Dunn
CEO, Best Buy 
“We are pleased to know that Google is making a move to strengthen Google’s (and thereby Android’s) patent portfolio. ZTE welcomes this step from Google to protect the value of Android ecosystem and the benefit of Android partners.”
– He Shiyou
EVP of ZTE Corporation and Board Directors, President of ZTE Mobile Devices Division 
“ASUS is a strong supporter of Android and we firmly believe in Google’s recent strategy. Their continued investment in innovation allows leading companies like ASUS to deliver superior user experiences.”
– Jonney Shih

Of course the future isn't set in stone and things could change quickly. Should Google see fit to switch to an Apple style vertically oriented company, they now are capable to do so, even if we believe it isn't in their best interest.

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