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Google To Acquire Motorola Mobility For $12.5 Bill
zacharye writes "Google and Motorola Mobility have announced an agreement whereby Google will acquire Motorola for $12.5 billion. The acquisition price equates to $40 per share of Motorola stock, or a premium of 63% over Friday's closing price. The move is considered to be an effort that will better-align Google to compete with Apple's iPhone, which currently owns two-thirds of profits among the world's top-8 smartphone vendors..."
That's one way to stop royalty payments.
Or did shit just get real? :-)
I read this on the BBC and I have to admit, I didn't see this one coming!
At least we know now why Google didn't seem too bothered about winning the Nortel patents. This gives it a serious cell phone patents battle chest, and a manufacturer of decent tablets and handsets to boot.
The question is, if it's going to be Google owned, will this mean Motorola devices will be opened up as up until now they seemed to be the most locked down Android devices. Judging by the openness of the Nexus One etc. I'd imagine and hope this will be the case!
http://www.google.com/press/motorola/quotes/
Most seem happy enough.
From the Google press release:
Motorola and Nokia are the two leading patent holders within mobile business, so this is potentially a very good opportunity for Google to use that portfolio as a litigation shield and helping to keep Android (litigation) free.
Given the only other decent Phone OS options get you iPwned, or Windows 7 (good ideas, easy development, complete lack of polish or apps), and, oh yeah, BlackBerry, I'm glad of it.
And for tablet, the options are one fewer for now.
I for one am GLAD google didn't stick to just search engines.
Self proclaimed typo king, and inventor of the bear destroying coffee table (patent not pending).
That's one way to stop royalty payments.
That's also one way to keep OTHER PHONE MANUFACTURERS from extorting royalty payments.
If only that also worked against Microsoft...
Contrary to the popular belief, there indeed is no God.
They may be great phone (hw) manufacturers, but in terms of software they are very, very incompetent, including wasting time on 'customization' that only bother the consumer and refusing to release updates (while Cyanogenmod runs circles around them)
I absolutely DON'T trust any of them to write a single line of code. Yes, I know how these companies operate.
how long until
So now that Google has all of Motorola's patents on 2G,3G,4G, (the hardware side) and apple has all those patents on user interface (software side), are we going to be seeing an epic east Texas showdown that results in every new smartphone requiring TWO huge additional licensing fees getting passed on to the consumer?
Google is poisitioning itself to get more involved in the patent fights:
"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."
http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html
Battle of the Apes, and Ballmer not invited?
Seriously, this will make some interesting monkey business.
It is of the same importance when Microsoft decided to jump on the hardware wagon too, through the Xbox. A lot of analysts were surprised but not overly surprised. Google, being a software only until now, doing the same as Microsoft seems natural.
This might work out ok then. Because I think Google has some software guys.
Only good things. Remember, it's not about Android. It's not about phones. It's about ads. Everything google does is just a way to serve up ads, and to serve up search which serves up ads. Google will make Android stronger. And if other manufacturers want to help, google will help them. Because it lets them sell ads.
We all know this is about the patents. But as Motorola Mobility is not Motorola Solutions, I'm curious to see what patents they actually got or if there are still a lot with the company Motorola Solutions. http://en.wikipedia.org/wiki/Motorola
Monopoly. You keep using that word. I do not think it means what you think it means.
I for one think that Google should stick to search engines.
It wouldn't too much surprise me if Google would actually prefer a world where they could do that. It's something that they are already good at, where getting patent-trolled seems to be less of a risk, and where their customer goodwill is probably at its highest.
Strategically, though, that tactic Has Problems in the medium to long term. If, increasingly "search" means something integrated into the shell of your lockdown iAppliance, or Microsoft OmniSuite 2012, Google becomes dependent on the goodwill of intermediaries, who have plenty of 'not as good; but they would tongue-wash our Ferrari for a chance to be our search provider' options to choose from.
Their various extensions into other markets, while probably driven partially by restless capital, also tend to be into areas that are calculated to enhance customer's abilities to continue to access core Google properties without involving intermediaries who have much to gain by either forcing Google out or forcing Google to pay for the privilege of remaining in.
I for one think that Google should stick to search engines.
They'd probably die.
Yes they are good at search.. but if that search is running on someone elses platform, and that platform is becoming more and more controlled (phones) .. they need to at least have their leg in the door.
That and at a certain size diversification is usually a good idea.
This will probably force Microsoft to buy Nokia outright. As much as they would like to just collect license fees, they need a vertically integrated platform.
Just Motorola Mobility. Motorola Solutions is not affected.
+1 IDisagreeSoHeMustBeATrollOrAnAstroturferOrAShill
Um. Because monopoly doesn't even kind of mean what you seem to think it means.
Apple isn't even close to a monopoly in either of its two biggest market-share products, iPod (75% I think?) and ITMS (largest single music seller, though I don't know what % that is). There are countless viable substitutions people can buy if they want to. There is no coercive force in play making it so you need to or must buy their products (compare and contrast this to Microsoft during its monopolist days, where it was incredibly difficult to buy a new computer without paying Microsoft a fee, and with any competitors software pre-installed).
Yes, its a vertically-integrated product line, but that is NOT the same thing as having a monopoly. "iPhone" is not the whole of a market, it is but one of a number of viable competitors. The App Store may be the only way to get native apps onto the device, but that doesn't mean Apple has an "iPhone monopoly" they are abusing to extend one market into another. The iPhone is not a market: there is plenty of choice out there for those who want to buy something else.
Monopolies are not illegal: only monopolies obtained or maintained through certain prohibited practices (which for single firms and not cartels are rather few and hard to prove: but you can't argue Apple with its industry-envied margins is engaging in predatory pricing, which is one of the things single firms can get bitten for doing under antitrust law), and using the power of a monopoly in one market to extend into another.
In no way does Apple fit into any of these categories (the only place you could even argue it is the App Store and its relationship to the iphone, except as Android supporters will tell you, iPhone is anything but a monopoly. You have to have a monopoly before you can use a monopoly to bad ends: and "monopoly" does not translate into, "the only person to make this particular thing that others are aggressively competiting with", even if "this particular thing" is the what you're making your addons for).
I wish Google would buy the Motorola Symbol division so we could see Android on their industry leading mobile computers (ie barcode scanners). The embedded Windows CE / Windows Mobile on those devices is garbage.
http://www.appleinsider.com/articles/11/08/15/google_ceo_anticompetitive_apple_microsoft_forced_motorola_deal.html
25,000 patents. Do you think they're going to be used defensively to hold off lawsuits? For $12.5 billion, I doubt it - they have to make that money back somehow. Therefor, the next question is "is the Slashdot crowd going to continue supporting Google once they start flexing their new patent portfolio muscle?"
The US DOD is studying using smart phones for troop communications. Having all the smart phones produced in China makes ZERO sense. Instead, Google can approach DOD and cut a deal that they will bring back manufacturing to the USA if DOD will buy their phones. WIth that approach, and throwing in automation, Google can have 10% of their phones being bought by the DOD. That lowers prices a great deal.
I prefer the "u" in honour as it seems to be missing these days.
I reckon by 2013 Google will either be making all Android hardware, or none of it.
What will the other manufacturers making Android handsets think about this? Who would license an OS from a company which also manufactures directly competing hardware and sells it on a large scale? There was broad dissatisfaction with the Nexus One, and that was just one handset. Clearly Google are most interested in the patents (to fight against Apple, Nokia, Microsoft et al) but is that worth destroying the partnership with other companies? Maybe they think they can go it alone.
Things Google should do that will benefit both Android users AND Google:
1.End all deals between Motorola and Microsoft/Yahoo to make Bing or Yahoo the default search engine on Motorola Android phones. Restore Google as the default search engine on these phones. Good for consumers who get full Google apps on all Motorola android phones and good for Google because they get more people using Google search and more eyeballs for Google ads.
2.Start unlocking bootloaders on all Motorola phones. Good way to make tech geeks love your phones and recommend them to all and sundry. (think about how much community support the first Droid got because of its unlocked bootloader vs how much the first Milestone with its locked bootloader got)
3.Throw away all your legacy phone platforms and standardize on Android for mid to high end phones (including anything with a web browser, email client etc as well as any phone that would have had a Java VM if it was based on a non-Android OS stack). Bring in a simple cheap new OS for dumbphones that dont have web browsing, Java or data connectivity.
Good for consumers (since they get more Android phones at the market points that used to be occupied with mid-high-end featurephones like the RAZR) and good for Google since they save money by abandoning work on a whole bunch of code from the various legacy OSs (including web browsers and Java VMs)
4.Threaten to use the combined Google+Motorola patent portfolio against Apple products like the iPhone and iPad unless Apple stops suing Android vendors. This is good for Google since (if Apple does the deal) it means less risk of being sued over Android and less patent royalties that would need to be paid. Good for consumers since patent royalties increase the cost of devices.
Even better would be for Google to create an Android defensive patent pool. Anyone working with Google on Android (including HTC, Samsung, Dell, LG etc) would be able to join the pool with any mobile device/OS/etc patents they want to contribute. Google would contribute relavent patents from the Google pool plus whatever the new Motorola pool has. Any Android vendor that is sued over an Android handset gets to use the entire Android patent pool as a counter-attack.
I for one wonder how AAPL has avoided anti-trust litigation
That is explicitly because Microsoft has been waving the antitrust flag at Google for about 2 years now. In Europe and the US Microsoft gathered a group of their partners together and filed antitrust complaints against Google In Europe and USA.
It is mostly patents. First, Motorola has a better patent portfolio than Nortel.
Motorola is also a functioning company that can make profits. If you think that value of Motorola future cell phone business without its patents is $6 billion then the costs of the patent portfolio to Google is *only* $6.5 billion. If Google wanted to, they can sell the Motorola division off which they wouldn't be able to do with Nortel.
Its also rather important to note that a monopoly IS NOT ILLEGAL IN ANY WAY.
Now, there are plenty of things you can get in trouble for if you've been deemed a monopoly that you wouldn't otherwise get in trouble for, but just being a monopoly in and of itself is 100% legal.
You don't get punished for being good at what you do, you get punished for taking advantage of your size to bully others out of business.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
http://www.sprintusers.com/forum/showpost.php?p=2585760&postcount=13
we shoulda bought Moto stock then...
posted 8/8/11:
Oh come on, don't predict Apple's demise so quickly......
The OS if free. Opening up the phones will only sell more hardware... something a hardware company should be doing.
If there were cellphone integrators on every block, and buyers actually exercised choice in their phone OS and didn't just accept what the phone shipped with, this would probably be true. But alas, all Google has to do is make sure Samsung and HTC have their copies of the source on time, and that takes care of a commanding majority of the market. They can release the source (maybe a slightly less useful source) to everyone else, but since a vanishingly small proportion of cellphone users make use of it, it doesn't really make a difference.
Samsung would be selling just as many phones if Android were closed. It'd be one thing if you were claiming there were 3rd-party developer benefits to Android, or moral benefits, but I don't think there's any evidence that the openness, in this case, creates sales, at least compared to the classic Microsoft model of closed source with an aggressive and open licensing strategy. From a business perspective Google's relationship with HTC or Huawei and MS's relationship with a Dell is identical -- HTC still needs a license agreement and to partner with Google in order to distribute the "real" Android, they're still under an NDA, etc.
Don't blame me, I voted for Baltar.
Most of us would agree >80% == Monopoly, so stick your head in the sand if you'd like..
Who is this 'us' that you are referring to? Antitrust is a specific legal formulation with it's own definitions and limitations. Just because the word you so happily bandy around sounds exactly like the word in the statute it means very little unless you apply it the way the law does. And you are most certainly not, as about a dozen other posters have pointed out.
Read up on Antitrust law and come back to us when you're so enlightened. That word really doesn't mean what you think it means.
Faster! Faster! Faster would be better!
That's sad. Motorola was once a great company. They were the only electronics company to successfully transition from tubes to transistors to ICs. They once made the best microprocessors; the 68000 series was way ahead of its time. (If the MMU for the 68000 hadn't been years late and badly designed, the whole PC world would have been powered by 68000 machines.)
But the semiconductor business was spun off as Freescale years ago. After giving up commercial mobile handsets, this leaves Motorola making police radios and related niche items.
I don't see how HTC, Samsung, etc could be happy about this. Android is no longer Open and now Motorola will be a version or two ahead of them.
How is Android no longer Open?
Rewarding Microsoft for attacking their business (Android, via the Microsoft/Apple/Oracle patent troll consortium) would be even worse than rewarding Google as a competitor.
I bet Google sat with the CEO's of each of these companies, and said, roughly, "look, we're fucked on these patents. The only way out of this is for us to own more patents than they do* and we have the cash to buy Motorola. We'll share hardware work with you, go at this as a partnership, and we'll build a wireless future together that will leave Apple and Microsoft in the dust. Let's play this as a non-zero sum game and take out the cause of our problems together."
This isn't Pepsico buying KFC and Pizza Hut, because Burger King and Pizza Hut were not collaborators. Giving the Motorola group preference against their partners would be suicidal.
* not planning on a political revolution - overthrowing the corrupt US Government would be the other way out - they're the enabling force behind the patent trolls
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
interesting how all the quotes say the same thing..."defending android and it's partners".
It's an incredibly clear message that it's the US Patent System that's crushing the market. In an era where the government needs to be doing all it can to encourage production, any government system that is crushing any morally legitimate market has no place.
No doubt Congress will do nothing about it but vie for the best seats to watch the Empire burn.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)