Google has bought Motorola Mobility, the devices arm of communications giant Motorola, for $12.5bn (£7.7bn), giving a significant technology boost to the Android platform in the increasingly competitive smartphone and tablets market.
Motorola Mobility was the mobile devices division of Motorola which was in founded 1928 and the home division. The divisions began trading as a separate independent company on January 4, 2011.
Motorola’s other business, Motorola Solutions, will remain a separate company with no ties to Google.
Motorola has been committed to Android since 2008 when the company chose Android as its sole operating system for the phone maker’s smartphones. Google also sees value in other parts of Motorola’s business, such as home devices and video solutions.
In addition, Google stands to gain a large number of patents with the purchase, which will aid it in the on-going litigation that Android faces.
According to Google, this purchase will not change how Android is offered as an open platform. Motorola will still be a licensee of Android, and the platform will still be open for other manufacturers to use.
Google says that the purchase will allow the two companies to “supercharge” for the “benefit of consumers, partners and developers everywhere.”
Conflicts with HTC and Samsung?
Google will run Motorola as a separate business within Google. The purchase is expected to pass regulatory approval and be completed by the end of 2011 or early 2012.
Despite Google’s promises of keeping Android an open platform, the move could cause conflicts with Google’s partners, such as HTC and Samsung.
Larry Page, CEO of Google, said: “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.”
Sanjay Jha, CEO of Motorola Mobility, said, “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”
Andy Rubin, Senior Vice President of Mobile at Google, added: “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”
‘Strain on Android ecosystem’
Ovum analyst Nick Dillon said the buy could raise wider concerns for the Android platform: “As noted by Google, a key objective of the acquisition is to gain access to Motorola’s sizable patent portfolio, rather than just its hardware business. Having been outbid in the recent sell-off of Nortel’s patent portfolio, Google was clearly willing to look elsewhere to build up its arsenal of IP and in the light of the growing number of IP legal disputes in the smartphone market; this move will put Google in a stronger position competitively.
“However, the move raises concerns for the wider Android ecosystem as the acquisition means that Google will become a hardware vendor. With this, Google will move from the position of partner, to that of competitor to Android handset manufacturers, potentially placing significant strain on the Android ecosystem.
“If, for example, Google provides preferential access to the Android code to its own hardware division, this would place other vendors at a disadvantage and may lead them to question their commitment to the platform, potentially pushing some towards other platforms.
“Given Google’s recent moves to exert greater control of the implementation of the Android platform, such as restricting access to the Android source code to select hardware partners, such a move is not beyond the realm of the imagination. One beneficiary of any move away from Android would be Microsoft and its Windows Phone platform, as many larger Android manufacturers such as Samsung, LG, HTC and ZTE are also Windows Phone licensees,” Dillon concluded.
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The transaction is expected to close by the end of 2011 or early 2012.
motorola.com/mobility.
