Google Buys Motorola Mobility, Practically Becomes a Handset Company

Today marks another milestone in tech history.

August 15, 2011 - Google acquires ailing Motorola Mobility for $12.5 billion or equal to $40 per share of stock or a premium of 63% over last Friday's closing share price.

google motorola

From merely providing Android as an open-source operating system to various mobile companies, Google's latest acquisition makes it practically a full-fledged handset manufacturer with full control of how Motorola's upcoming Android phones will be designed, what their features will be and what services the handsets will provide to end consumers.

"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," shares Google CEO, Larry Page.

TP Thoughts:

So why this acquisition?

1. To be able to better compete with Apple, which is currently the top phone maker in the world, perhaps Google deemed it best to have total control of how the Android experience - including the hardware, software and services - will be given to consumers.

2. Nokia, in partnership with Microsoft, is currently prepping to regain its market share in the United States and 'stage one of the biggest turnaround stories in history' by undercutting the price of Nokia WP7 phones -- That's straight from the mouth of Chris Weber, Nokia's Head of Sales in North America.

3. Motorola, being one of the true pioneers in mobile phones technology, owns a staggering 17,000 patents! The acquisition will definitely strengthen Google’s patent portfolio, enabling the company to better protect Android from anti-competitive threats from Apple, Microsoft and other companies.

What will happen to Samsung and other Android-phone manufacturers?

Now that Google owns Motorola, of course, Google would want to make the most money out of the investment by being able to sell a lot of Motorola phones. And that can only be achieved if Motorola Android phones will be better than all alternatives from other brands.

Note that despite the current popularity of Android phones the world over, the platform never really became a true money-maker for Google -- with online advertising still making the most revenue for the company. You can't say the same thing about the companies that adopted Android. Who needs who?

So what will happen to Samsung and the rest of the Android-phone makers following the Motorola acquisition? Well, only time will tell. But, needless to say, it will be hard to compete with a handset company that creates the very software for your own phones.

Looks like Nokia made the right decision after all (at least, as regards not joining the Android bandwagon). :)

No comments:

Let me know your thoughts on this TechPinas article.