With the largest acquisition in its history, Google Inc. has agreed to pay $12.5-billion (U.S.) to buy the American mobile phone maker Motorola Mobility. The price of $12.5 billion represents a 63 percent premium on shares last Friday, with Google having in its reserve $39 billion at last count.The Android-Motorola combination will simply give Google a upper hand in terms of solely owning a reliable, popular, and user-friendly mobile Operating System as well as owning a tried and tested, popular, and attractive hardware.
“The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing,” the company said in a release.
“Motorola Mobility's total commitment to Android has created a natural fit for our two companies,” said Google CEO Larry Page in a news release. “Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers.”
What Google will also get from this shrewd acquisition is Motorola’s 17,000+ patents on phone technology. Google recently lost out in bidding for thousands of patents from Novell Inc., a maker of computer-networking software, and Nortel Networks, a Canadian telecom gear maker that is bankrupt and is selling itself off in pieces. Motorola will provide Google with nearly three times more patents than Nortel.
This move not only underscores the importance of dominating the smart phone industry moving forward, it also changes the dynamics of the global mobile battlefield very significantly. Further it marks a new chapter in the worldwide growth of Google’s mobile Operating System Android, and evolution of Google as a company which has grown from a startup search engine to a multi-product company servicing a wide range of customer portfolio in the span of little under 13 years.This is the 2nd major announcement by Google in span of three months when in late June 2011 it announced its Social Networking platform Google Plus (Google+). In the last three months Google has demonstrated that its betting the company’s future on Mobility and Social Networking – a direction that will dominate the 21st century.
The announcement today will change the landscape of the mobile industry tremendously. Until recently Research In Motion was the lead player in the smartphone arena, however the arrival of Apple and Android in the market started to erode the prominence of Blackberry.
While Android’s strategy was to partner with as many mobile manufacturers as possible, Apple continued to reap the fruits of providing consumers with an innovating, slick looking, and Next Gen smart phone. Of all the major players in the world of tech and mobility it looked like Microsoft and Nokia were the only ones watching from the sidelines while Apple and Google were making big plays and taking away the momentum from Research In Motion.
Then on February 11th 2011 Microsoft and Nokia teamed up when they announced a partnership to bring Windows Phone to Nokia handsets. This generated a lot of excitement and suddenly the smartphone industry was no longer a monopoly with big names such as Apple, Nokia-Microsoft, and Android phones on Motorola, HTC, and Samsung offered consumers and businesses a choice they never had, while RIM’s fall from the grace became more eminent.
Today’s acquisition is another step in the battle of smartphones and I expect that the top echelon of players in this market would soon be Apple, Motorola, and Nokia with RIM a distant fourth. And although Google at this point saying that they are not planning to change anything with HTC and Samsung you can be rest assured that as time will progress and Andriod demand will increase Google would only put their mobile OS on their own hadware device. If I am at incharge of HTC or Samsung I am already planning my strategy after Andriod.
And as loyal, dedicated, and avid user of Blackberry it pains me to admit that this deal could also be the final nail in Blackberry’s coffin. While I still believe that Research In Motion could turn it around and become dominant name once again, at this point it looks like they will be forced into a merger and/or acquisition by one of the above big names.
Off all the companies listed in this article who do you think will acquire RIM? I know who I am betting my dollars on - the sofware manufacturing giant is unlikely to sit on the sidelines.
Thanks for Reading.
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