In a very interesting development, Google has just announced that it will be acquiring Motorola Mobility, the handset and tablet division of the company for a cool 12.5 billion dollars. As you can probably guess the primary driver for Google was its inherent lack of patents and Motorola’s 17,000 patents with another 7000 in the pipeline were too good to pass. Motorola will be run as a separate business and will remain an android licensee and Google promises that there will be no change on how Android is run.
While this will provide some cushion for Android manufactures who were getting sued left, right and center, it will also sow a seed of distrust. While Google may still be calling Motorola just another Android licensee, make no mistake it will be the first among equals and that cannot make Samsung, HTC, Sony Ericsson or LG happy. While all of these companies has put its game face on and given a public hurrah! to the deal, I wonder how they actually feel.
“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.
“I welcome Google’s commitment to defending Android and its partners” Bert Nordberg, President & CEO, Sony Ericsson.
“We welcome Google’s commitment to defending Android and its partners” Jong-Seok Park, Ph.D, President & CEO, LG.
“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.
In the conference call following the announcement, Google did make it clear that rights to make the next Nexus device are still up for grabs for all partners and that Motorola would also participate in the bidding process just like Samsung or HTC. The current winner for the Nexus lineup was selected last Christmas, so we’ll only know the real outcome of this deal when its time for the next Nexus.
At the end of the day for Google, a large part of the 12.5 billion was mainly spent for patents, but it would be foolish of them not to effectively utilize the newly acquired hardware arm of theirs only for set top boxes, but for cutting edge smartphones as well. This represents a huge challenge for them, as no one has really successfully licensed a platform and competed with licensees, all at the same time. A slight hint of favoritism could push Samsung and HTC towards Windows Phone and that’s certainly not what Google is hoping to achieve.
The deal still needs to clear regulatory hurdles across the world, but once that happens it will be definitely be a very interesting time in Android’s growth story.