Search engine giant Google has moved heavily into the hardware market by buying mobile phone maker Motorola Mobility for $12.5bn – around £7.7bn. A joint statement said the boards of both companies had unanimously approved the deal, which should be completed by the end of this year, or early in 2012, subject to regulatory approval..
The move means that Google will follow Apple’s model by controlling the software, hardware and content on its devices. Microsoft also moved towards a similar solution earlier in the year. While it did not go as far as buying Nokia, it struck a deal that would make Windows Phone the sole smartphone platform on its handsets.
Google is effectively betting that the future lies in mobile computing devices rather than desktop PCs. And as smartphones are now effectively small computers that can also make phone calls, it seems a good call.
But where will the deal leave other manufacturers, such as Samsung and HTC, who use Google’s Android system on their phones? They will fear that Motorola will have a clear advantage and may get first access to new features or software releases.
Industry analyst Stuart Miles cautioned that if Motorola was seen to get too much preferential treatment – such as early access to new versions of Android, it might alienate the broader community of hardware manufacturers. But would that bother Google?
Larry Page, Google chief executive, 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.”
The Android ecosystem? Don’t you just love techno-speak?
The smartphone market is highly competitive has escalated into a bitterly fought patents war between the major manufacturers and software giants. Microsoft and Apple are suing Motorola and Google over a string of alleged patent infringements relating to Android.
Monday’s deal means that Google now owns Motorola Mobility’s swathe of patents, thought to total about 17,000, and strengthens its position in the market.
Android phones are becoming increasingly popular and this move puts Google in a position to capitalise on the success of its operating system. Apple and RIM, which manufacturers BlackBerries, must be looking at this deal and assessing its impact on their own businesses.