Google officially announced this morning that they are purchasing Motorola Mobility. First, this is a huge acquisition in the mobile industry with a purchase price of about $12.5 billion. This purchase is very interesting in a few different ways. The official announcement has some interesting information as well. There is the obvious patent defense purchase:
We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to “protect competition and innovation in the open source software community” and it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.
But Motorola is obviously much more than just a patent collection. They are a mobile hardware manufacturer. In particular, they make mobile phones that use Android. There is a quote that infers some future changes to how Android is released and what phone is the “Google phone”:
The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences.
Basically, if Google can use the hardware team from Motorola, there is no need to try and work with a third party to create the “reference implementation” phone. There could be a Motorola device, maybe even in the Droid brand, that becomes the next official Google phone. Google has wanted to get into hardware in the consumer space, so having a mobile phone division makes a lot of sense.
Not only did they buy phone hardware, but they furthered their push into the consumer’s home:
Motorola is also a market leader in the home devices and video solutions business. With the transition to Internet Protocol, we are excited to work together with Motorola and the industry to support our partners and cooperate with them to accelerate innovation in this space.
So, they get a proven provider of consumer devices and they get to sneak into your living room, possibly with more commitment than before. Don’t forget, Motorola has already released a tablet device, and the Atrix which can be docked and become an Android laptop. One question that arises is what happens to the current partners? HTC developed the first Google Phone, the Nexus One and Samsung developed the Nexus S. Do these partnerships disappear because of the Motorola purchase? Google will need to tread lightly here, otherwise those partners could decide that a different platform is in their best interests.
Overall, this acquisition gives Google some things that they have desired for some time. The mobile patent collection definitely gives them some help in the coming battles with Microsoft and Apple. The mobile phones give them a family of devices to test and develop Android on. They also get tablets to play with and any other home consumer devices that Motorola has developed over the years. I would expect that GoogleTV should see a significant boost in attention given that Motorola develops consumer devices as well as cable boxes for many providers.
This may have sounded like a patent defense acquisition, but Google also gets a nice collection of mobile consumer devices. Things just got a little more interesting.