August 12, 2011 was a day of surprise when Google announced its acquisition of Motorola Mobility for a cool $12.5 billion and many are speculating that this is so that the Android operating can be given a chance to succeed.
Google CEO Larry Page said they went ahead with the acquisition for two reasons. Firstly, because the company saw Motorola Mobility as a dedicated Android partner that will enable Google to supercharge the Android ecosystem. This will increase competition in mobile computing by strengthening Google’s patent portfolio against threats from Microsoft, Apple and other companies. The second reason is because Motorola is the market leader in the home devices and video solutions business.
Page has no intention of merging the two companies and Motorola will run as a completely separate business. Android will remain the same – an open platform available for anyone who wants to use it and Motorola will continue to be one of the many Android licensees.
By acquiring Motorola, Google now holds more than 17,000 patents belonging to Motorola. These will help Google combat any patent-infringement claims from competitors. However, some experts are say that Google has taken a big bet by stepping into the messy physical world of selling hardware products and the success of this deal depends on how well the two companies can accelerate innovation and offer superior choices to consumers.
With Motorola holding only 9% of the market share, Google is surely under pressure to boost those figures. There is some good news though, Google can look forward to support from manufacturers, many have already given the ‘thumbs up’ to the acquisition including the CEO’s of LG, Sony Ericsson, Samsung and HTC.
Many questions remain with this news including how Microsoft and Apple will react? Will Microsoft go and buy its own handset manufacturer? I guess we will just have to wait and see.