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.

Comments

is it just me

[Anonymous Coward]

Or did shit just get real? :-)

Re:is it just me

[erroneus]

Oh yes it can. If the terms for Google's new IP are up for renewal or renegotiation, you can expect cross-licensing deals and all sorts of things protecting Android phones and devices.

What this doesn't protect against is trolls like Mark Small, Nathan Myhrovld and all those. "Defensive" patents are a useless strategy against trolls since they have nothing to gain by cross-licensing any tech.

You know, if the incentive for copyrights and patents are to encourage creativity, then it certainly wouldn't hurt anything if the creators were not allowed to sell their intellectual property.

Re:is it just me

[nharmon]

I dunno, did you just multiply the wave function by its complex conjugate?

Re:is it just me

[AliasMarlowe]

I dunno, did you just multiply the wave function by its complex conjugate?

He's making a Slashdot comment, not a synthesizer

And a big WHOOSH to you, too.

Re:is it just me

[Lev13than]

Depends on what you think the "shit" is. Some people are saying it's hw/sw integration, and others are all about patent trolling. In reality, this is part of Google's effort to strengthen its position in eCommerce, specifically mobile and POS payments.

Put an RFID chip in every phone and you instantly get an EMV-compliant card replacement and an EMV-compliant card acceptance point. Forget all that Square magstripe bs - this would be the real thing. Combine it with Google Wallet and you have an end-to-end solution where anyone can make or accept payments via their phone. With Google controlling the hw and the sw they can set the standards. To make it even more interesting, think of what would happen if/when Google buys MasterCard.

Go ahead with this and you'll have every taxi driver, flea market, convention booth and convenience store in the country with cheap access to payments issuance and acceptance. Now move that model to Africa and the Middle East. The future of mobile isn't handsets - it's payments.

Didn't see this one coming

[Xest]

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!

Re:Didn't see this one coming

[fuzzyfuzzyfungus]

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!

That will be interesting: I suspect that it will tell us whether the locked bootloader nonsense is actually a carrier demand(and, if so, a carrier demand that they want to stick to, or one that they'll bend on with a touch of pressure) or whether it was a 'hardware companies would prefer that software upgrades be accomplished by hardware replacement' problem...

Obviously Google doesn't want to lose money on their new hardware division; but it seems pretty unlike them(and poor strategy in the face of Apple's relentless hardware/software integration) to play nickel-and-dime software lock upgrade drive games to eke out a few extra handset sales at the expense of customer satisfaction and overall success of Android and the various web services that Google actually makes their money on.

On the other hand, if handset locking is some sort of carrier fetish(that they are only willing to make limited exceptions to, for the occasional flagship device), we might not see much change. Google's attempts to crack the carriers through direct sales have been underwhelming in their success so far, and Apple's sales number suggest that Joe Public isn't clamoring for an unlocked bootloader... At least Google is unlikely to cruft up stock Android too heavily.

Re:Didn't see this one coming

[Andy Dodd]

I keep seeing people claim that locked bootloaders are a carrier demand... When this is clearly NOT the case.

Across ALL carriers, at least in the United States:
None of the Samsung Galaxy S line have locked bootloaders. (Tab 7s may be mildly locked?) The exception is the Galaxy Tab 10.1 line, which actually has randomly locked bootloaders for the non-carrier-distributed wifi version. (Don't know about the Verizon LTE variant). Even then, the bootloader locking is fairly minimal. The closest to "bootloader locking" I've seen in a Samsung Android phone is locking out flashing alternate bootloaders (Infuse 4G), but never a bootloader that locked out flashing any kernel or userland you wanted.
A small number of HTCs came out locked in early 2011 - HTC quickly reversed this decision after user outcry. The locked phones were distributed across multiple carriers.
Nearly all Motorola Android phones are locked down, regardless of carrier.

Motorola may claim it's the carrier - but if you look at the trends across carriers vs. trends across manufacturers, the trend CLEARLY follows the manufacturer and not the carrier.

Re:Didn't see this one coming

[Xest]

I actually made an assumption there, but you have a good point. I Googled Motorola mobility though, and got this:

http://www.motorola.com/Consumers/GB-EN/Home

The page title says:

Motorola Android Mobile Smart Phones and Tablets - Bluetooth Accessories - Home Video Networks - Motorola Mobility, Inc. United Kingdom

So it looks like it does include tablets. But what I didn't assume was the other things it appears to include:

http://www.motorola.com/Consumers/GB-EN/Consumer-Products-and-Services

I didn't even realise Motorola produced some of these things, but could it mean we'll see Google SatNavs, Google Car Kits, Google Cable/DSL modems, Google DVRs, and er, Google Baby Monitors?

I'll be intrigued to know if Google discontinues some of those less relevant lines, but this is kind of exciting if you're a fan of Android, because if Motorola does DVRs, SatNavs and Car Kits too then Google may well be planning to extend Android into the car and living room with a bit more seriousness than previously the case. It looks like Motorola Mobility has it's fingers in all the pies a tech company might want to be able to produce a full lifestyle ecosystem encompassing home, and travel (god, I feel like I just spat out some sales speak there, excuse me whilst I go vomit).

I've always wanted to be able to just add things to my calendar on my tablet in the kitchen, then walk into the living room and use it to display TVs listings to tell my TV what to play, or to choose some content from my fileserver to stream to the TV, then set it to play some music. Then when that's done, walk out to my car and automatically have my car continue playing whatever music I'd previously set playing on my TV, and when I reach my destination have my phone take over that playlist as I put my headphones on and plug them into it. Obviously you can kind of do all this now, but it requires some serious hackery, and is far from being a pleasant, seamless, system. You need to really know what you're doing.

Let's face it, it's the future, it's just waiting for someone to take a serious stab at it. Will Google make an attempt at that now that they've got the hardware base to go with their software division? I'm hoping so!

The only thing we'll need then is for it to be standardised so that you can buy a product from any manufacturer whether it's an iPad or a Playbook,a Xoom, or a Tab and have it integrate into such a system. Okay, well, maybe now I'm REALLY asking too much ;)

Re:Didn't see this one coming

[Zaiff Urgulbunger]

They're up 15% immediately after the announcement. That tells something.

It tells us that the market thinks there's a greater chance Nokia will soon be acquired by someone else -- probably MS. This has nothing to do with mobile OS wars!

Re:Didn't see this one coming

[93 Escort Wagon]

I bet other Android manufacturers are even more worried, now that Google owns their own hardware too. Suddenly all the Android manufacturers are using a competitors product and then trying to fight against them too. This is also why Nokia's stock price is rising up. It's bad times for those other Android vendors, and I think they're already looking at something else than Android.

I'm pretty sure Google would be aware of that concern; they've already stated that it will remain as a separate business, and I expect that's because the last thing they want to do is be seen to be competing with their own partners. I'd guess this purchase was forced by the patent situation and not because Google really wants to get into manufacture.

Of course they say that; what do you expect? Companies have teams of lawyers and PR professionals whose whole job is to come up with the right things to say.

The question is - why do you automatically believe it? I doubt you'd give any other company the same benefit of the doubt. Did you assume Comcast was being completely forthright with everything it said while purchasing NBC?

Reactions from other Android Manufacturers

[Arch_Android]

http://www.google.com/press/motorola/quotes/
Most seem happy enough.

patent shield

[tero]

From the Google press release:

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 âoeprotect competition and innovation in the open source software communityâ and it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Googleâ(TM)s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.

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.

Re:I for one...

[ByOhTek]

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.

Re:Not a bad chioce

[JamesP]

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.

Re:Not a bad chioce

[localman57]

This might work out ok then. Because I think Google has some software guys.

Re:Hardware vs Software

[gbjbaanb]

I can see the patent battles now:

Google: we have patent "using radio waves to provide mobile telephony".

Apple: we have patent "making something in a rectangular shape with 1 button and rounded edges"

I still think all the vague patents need to be scrapped, but that won't affect any of the new Google "real invention" patents they've just acquired.

Re:I for one...

[Anrego]

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.

Microsoft

[akirchhoff]

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.

Re:I for one...

[Ixokai]

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).

Easy way to increase production

[WindBourne]

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.