105 Comments

Summary:

Google may not have had much of a choice when it came to buying Motorola Mobility for $12.5 billion. If it didn’t, someone else would have, putting the company in an even bigger patent hole. Who else was interested in the company? Read-on and findout.

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Google may not have had much of a choice when it came to buying Motorola Mobility for $12.5 billion. If it didn’t, someone else would have and that would have put the company in an even bigger patent hole.

Our sources say that Motorola was in acquisition talks with several parties, including Microsoft for quite some time. Microsoft was interested in acquiring Motorola’s patent portfolio that would have allowed it to torpedo Android even further. The possibility of that deal brought Google to the negotiation table, resulting in the blockbuster sale.

Motorola found a Google deal more digestible because Microsoft had no interest in running a hardware business and was essentially interested in Motorola’s vast collection of patents. Google moved aggressively, and at $40 a share, Google is now paying a 60 percent premium to Motorola’s recent stock price. The deal it struck gives it access to Motorola’s strong portfolio of 17,000 current patents and 7,500 patent applications across wireless standards and non-essential patents on wireless service delivery.

The high-level talks between Google and Motorola started about five weeks ago. Google CEO Larry Page and Motorola CEO Sanjay Jha were talking directly, and only a handful of executives were brought into discussions. Our sources suggest that Android co-founder Andy Rubin was brought into the talks only very recently.

My view is that while Google might have won the battle, in the long run it has put the Android ecosystem at risk. Mobile industry insiders view this as a ray of hope for Windows Mobile Phone 7 to sign-up the disillusioned handset makers who at this point must be reworking their mobile OS strategies.

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  1. Idon’t Know Monday, August 15, 2011

    I seriously doubt Google has any interest in manufacturing. Neither do people at Motorola mobility who the think they are going to be spun off while Google keeps the patents.

    1. Not sure how this is going to play out, but from what I am hearing is that the hardware business is going to be around for a bit.

      1. Of course, why would Google kill a business that gives it a critical piece it has been missing in the war against Apple: a carrier relationship? Not only that, but Motorola Mobility produces a lot more than just handsets. They also make a lot of hardware for the home, a battleground where Google has failed miserably (i.e., Google TV) but where Apple has made significant inroads in creating a unified platform (iTunes) that links mobile, TV, and media.

        http://blog.jasonthibeault.com/index.php/2011/08/15/why-google-motorola/

      2. Jason, if you think the broadcasters really didn’t like GoogleTV, guess how cable providers (the real purchasers of Moto settop boxes) feel about it? I’ll give you 3 guesses.

      3. Karthik Chandramouli Om Malik Monday, August 15, 2011

        Besides the obvious patent play, it seems that Google took an opportunity to shore up Android loyalty by taking MOT off the table as a potential WP7 customer, to which Sanjay had recently alluded. Google gains a baseline of 30+ million units per year, which shores up Android against any minor defections to WP7. Not only was this a defensive IP move, it may have been a defensive move to prevent MOT from diversifying away from Android and fracturing this young alliance.

    2. Oh I agree – manufacturing is a while different kettle of fish than software!

      Headache is too gentle a word for it – a splitting migraine more likely!

  2. Until MSFT acquired Nokia…

    1. your world retweeted Edwin K. Monday, August 15, 2011

      Microsoft hasn’t acquired Nokia yet.

    2. Sorry for the typo…I meant Until MSFT acquire*s* Nokia (or Unless MSFT acquires Nokia).

    3. Microsoft would be better off acquiring RIM

      1. Sadly my friend in this arena RIM is viewed as a one trick pony. It’s cache has been lost via the new technologies of Android, iPhone and even the new MSFT Windows 7 phone OS. They’re bound to go the way of Motorola and get acquired if they are so lucky to get a deal.

      2. Texrat the Crypticum Keeper Eric Swinson Tuesday, August 16, 2011

        Given Nokia’s huge WP7 arrangement with Nokia, it actually makes more sense for a marriage there.

      3. Microsoft won’t buy anyone. At least Ballmer is smart enough not to compete with his own customers.

  3. Michael Fierro Monday, August 15, 2011

    Om, do hardware manufacturers really worry about this acquisition, or was that just your gut reaction? I don’t think Google has any intentions of competing against the other phone manufacturers, they just wanted the patents. I will eat my hat if Google doesn’t spin out Motorola.

    1. There is a lot of confusion right now around the whole Google strategy and it would take a lot of work for the company to calm frayed nerves of its partners.

      1. Michael S Collins Om Malik Monday, August 15, 2011

        If I’m HTC, Samsung, or one of Google’s other partners I have to sit back and analyze this. Apple and MSFT have been beating us senseless with patent infringement cases all over the world. Until today Google had very little to hit back with. They were bringing a knife to a gunfight, as it were. Now they’ve got an Uzi and a bazooka.

        Seriously, if I’m a Goog partner I fear Apple and MSFT *MUCH* more than I fear a Goog/Motorola partnership. This deal may well have restored the balance of power in the madness that is the world’s patent/IP schemes.

      2. This isn’t a cold war, Michael. This is a all out scramble. Google having a potential weapon will in no way stop Microsoft from demanding money and Apple from demanding manufacturers desist from using their ideas. Google’s new patents don’t change the equation enough.

      3. Yup, what “Michael S Collins” said. By the way, I’m not sure Google is paying such a premium after all. Carl Icahn — who has representation on Motorola Mobility’s board and was in on the deal — just said on Bloomberg that part of that $12.5b price, includes about $3b in cash that MM is sitting on, and about another $3b for the set-top business.

        Not looking bad for Google.

      4. You’re just speculating. Due to your contacts in the Mobile industry (you organizing Mobile conferences and all), maybe it would be wise of you to state when you are speculating and when you are basing your text on stuff you heard from the top people in those actual companies.

        My guess is all Android companies are way happy, Google will use those 19 thousand patents to kill off any attempts from anyone to sue Android partners anywhere in the world. If Apple insists to sue Samsung in Germany? Bang, Apple may not make mobile phones anymore worldwide.

        Only troubles left to sort through are people like Oracle who don’t really as far as I know are directly involved with mobile technology.

      5. People seem to think that Motorola can be Android’s silver bullet when in fact Microsoft and Apple had already sued Motorola before this deal. They are not immune to patent risks. In fact, in Germany there is litigation against the Motorola Xoom tablet on the way, and Apple is shooting for another injunction.

      6. What other options do these carriers have? Putting Windows on their phones makes them Windows phones, rather than HTC or Samsung.

      7. This is a nuclear arsenal to use for a MAD strategy against the Two Evil Steves. If Apple doesn’t quit playing their IP troll game, GOOG can block iPhone6 in the courts until Jobs is long gone from his corporeal body. GOOG doesn’t survive from phone business, Apple does.

        The Two Evil Steves now have to make a decision to compete in the market or take their whipping in the courts.

        Good for GOOG!

    2. MMI, spun out sans patents, is what? A $2 billion dollar business, add in cash, a $4 billion dollar business? How will GOOG investors feel when they find out they bought $8 billion in patents that may or may not save the day?

      1. Motorola’s patents are significantly more valuable than Nortel’s, and those went for over $4 billion.

      2. You seem confused, Rurik. That’s exactly what I said. I was trying to come up with a hypothetical valuation fro MMI without patents and after 2 or 3 years of multiple spinoffs. No one would want to buy them, so Google is stuck with them. They need to make it appear as if this is not a $8-10 billion patent purchase.

      3. They should feel better than having a money losing hardware business with 19,000 employees of varying worth to worry about.

        But my feeling is this is all about the iPad — Android tablets have flopped miserably, Google may have seen the writing on the wall — if they didn’t start making their own Google branded tablet hardware, the entire tablet market was about to be ceded to Apple and the iPad.

      4. @Tim F: sorry, totally misread your comment. Yes, you are right that it’s essentially an $8bn patent acquisition. Maybe HTC might want to buy a patent-free Motorola for the brand? It’s weak though — when they could have bought Palm in 2010 for a billion and change, *including* the patent portfolio.

    3. What if Google opens up the patents across all it’s partner handset makers for Android manufactured phones?

  4. There is not much to differentiate hardware these days – witness the specs for the Android tablets out there currently. It appears that demand is driven on the software side – for all the talk of Android fragmentation among multiple manufacturers – they are still activating 550K or so per day. Does anyone have any reliable numbers for WP7? And does anyone think that a big hug from Samsung or HTC will change those numbers?

  5. Google has made it clear that they aren’t going to contain Android or block handset developers from still using Android and a few developers have already issued statements of support because, when you get right down to it, they too have licensing protection by proxy if they are in bed with Android.

  6. Apple suing Google has put Apple at risk, as now Android will be an even stronger platform, as there will be a solid, state of the art hardware system that all other manufacturers of Android OS based phones can deliver. Apple is suing Google to hold it back, trying to avoid what happened to it with PCs when Microsoft copied them and then dominated the market. However, it will backfire on Apple, as Google will not only have state of the art OS software, but hardware as well, where Apple has enjoyed the advantage. Until Apple opens up its system, Android will eventually garner 75% of the market (it is already at 48% to Apple’s 18& global share). Apple needs to stop suing, and open up its platform to other manufacturers. It looks like it will be a post Steve Apple that would allow such a possibility.

    1. What fantasy land do you inhabit?

    2. Apple isn’t suing Google. Maybe you were thinking of Oracle. However, Motorola was/is suing Apple. You really need to get your facts straight before posting.

      As for Apple licensing iOS, that will never happen with or without Steve Jobs. iOS has 70% of the profits, 90%+ of the tablet and personal media player with apps (aka iPod Touch) markets. They aren’t haring that pie no matter what Google does (and PS if Apple felt the least bit threatened by the Motorola purchase they would outbid Google for it — they don’t and they won’t).

      1. Apple is suing Google by going after Samsung and others.

      2. Larry Ellison at Oracle may very well be suing Google on behalf of his good friend Steve Jobs at Apple

      3. Oracle is suing Google as Larry Ellison may be trying to defend his friend Steve Jobs at Apple.

      4. @Roy: You *really* need to do some homework! I suggest starting with a dictionary and maybe a thesaurus.

      5. you are the one living in fantasy land, Apple going after Motorola is impossible due to anti-trust concerns. Doesn’t matter how much money they have.

    3. TONS of patents!!!
      Anybody here can tell us how many of ‘em Apple, Oracle and Microsoft have already licensed, or how many MMI just sat on without trying to get anything for ‘em? Any guess how many cell phone patents Oracle, which doesn’t sell any phone hardware, wants, in addition to whatever rights they now have?

      “Inquiring Minds Want to Know!” ©

      1. The separate Apple and Microsoft each involve a little more than 20 Motorola patents. I would imagine they would have already used most of their best ammo at this stage of those cases.

    4. er, no. apple will never license iOS. theyve been down that road, and it didnt work.

      youre also wrong that this is playing out like the Windows/Mac war. for many reasons. one of which — iPhone is the #1 selling smartphone in the world, and Apple is the most valuable company in the world.

      1. iPhone is the #2 selling Smartphone in consumers’ minds. They have a choice and iPhone ain’t #1.

      2. really iphone 4 is now outselling the samsung s2 – dont think so -

      3. The Samsung Galaxy S II has only started selling in the US. So what you’re saying is that the cumulative total of sales worldwide compared to the Galaxy S II’s non-North American sales is greater — when US consumers have one of the largest purchasers of Android handsets.

    5. Always nice to hear from a well-informed Android fanboy. (Please, someone – find one for me.)

    6. yes roy u sound too funny. There s definitely a drawn line between Google being Google and manufacturers…

    7. PhoneOS market share only matters in so much as to profits and influence on the developer ecosystem. Apple is the undisputed profit leader in the hardware space, taking 2/3rds of smartphone profits with about 25% of the marketshare. And even though Android is gaining marketshare wise, the developers just aren’t flocking to Android in the way most expected. And that’s because developers aren’t making money on Android apps due to the nature of the Android ecosystem. Nearly all of the mobile app profits are going to Apple and their developers. So, I think Apple is not only OK with how things are shaking out, I think they’re in the driver’s seat at the moment. New markets don’t always adhere to old market rules.

  7. Stephen McAteer Jr. Monday, August 15, 2011

    Um, windows mobile? Really? Microsoft is phasing out that Os, so why would htc and samsung put their fortunes in that camp? Might want to get your facts straight!

  8. Santosh Panda Monday, August 15, 2011

    It seems India’s Videocon had plan to buy Motorola Inc.’s mobile-phone operation $3.8 billion in 2008 http://bloom.bg/rdyP2J

  9. There’s this…
    Now they’ve lost their GPL Linux license it appears – http://t.co/urlOKPA
    Things just keep piling up because Google was so sloppy – Can they really recover?

    1. Well you can’t “lose” a GPL license — it’s not like a license to practise law or operate a casino. But you can breach its terms. And then you fix your mistake.

      It’s strange how there is a sudden epidemic of GPL FUD astroturfing — did Microsoft dispatch a secret PR team onto the internets?

      1. That’s not true. See section 4. Once terms are breached, the license no longer applies and the breaching party is now in violation and must reach a new licensing agreement with the copyright holders . . . EACH of the copyright holders. There is no guarantee that all of the copyright holders will allow a renewal of the GPL2 based on simple compliance. It only takes one hold out, and the breaching party is vulnerable to injunctions to cease selling/importing the product that violated the GPL2.

        It doesn’t matter if the breech occurred in the past and the distributor is now in compliance. Once the violation occurs, the violator has forfeited the GPL2 license.

        If it wasn’t for Section 4, the GPL wouldn’t have teeth. These are the facts, not FUD. If you’re going to make astroturfing accusations, you might want to study up before posting.

      2. Maybe I don’t know what I’m talking about either! Let me refine my comment:

        The violation of the GPL2 wouldn’t necessarily apply to all of the kernel, just those parts owned by a copyright holder that wanted to enforce it. If the part held by such a copyright holder was a trivial snippet, it could be rewritten or worked around before there was much damage to the OEM. If it was integral to the kernel, the situation would become dire.

      3. No, just loads of IT wannabee Apple fanbois.

    2. Yes PXLated, we would like to get opinions from a biased Apple fan like you who is very objective. I guess all designers like you just drool over Apple.

    3. 1 This doesn’t directly affect Google since it’s the handset manufactuers.
      2 “Most Android Manufacturers” does not mean most Android handsets. The largest Android handset and tablet manufacturers are GPL compliant. The ones that are non compliant are the small Chinese shops
      3. To see the effect this will have we only have to look at cases where this has happened before. The Lawyers for the Open Source crowd want compliance more than anything else and in the past have given companies plenty of time to correct the problem and settle. In some cases they have been forced to prevent manufacturers from distributing GPL code but that’s been rare.

  10. Does MOT/MMI hold a Java licenses?

    NFC [HW] for Google’s strategy, or Apple will dictate the future integration of data Google needs for search. Context is about data integration. Sensors (HW) will create a lot of the data in the future. As we have seen with Bing deals companies are not afraid to bypass Google for deals, but Google needs the data.

    Question: What about Google voice, will the carriers keep MOTOGOO devices with a little negotiation if Google voice goes away? Will MS shut up if it does and skype prevails.

  11. Jose L. Rodriguez Monday, August 15, 2011

    Get ready for better integration and less fragmentation of the Android platform. One way Google is expecting this acquisition to pay off is by creating tightly integrated Motorola devices that are so well received they will become the devices to “copy” by other manufacturers who offer the Android platform. This will give more leverage to Google when it comes to telling the other manufacturers what/how to integrate Android into their hardware offerings (less of Sense for example). Fragmentation will be reduced and Android will continue its to dominance of the mobile worldwide arena.

    1. @Rodriguez its a nice scheme but nothing is for sure yet. Let s see what google has in store with the hardware part…

  12. Marthur Mcfly II Monday, August 15, 2011

    Does anyone have a good idea where this leaves IDCC Interdigital?

  13. “Disillusioned” handset makers? So you think, what — they’ll flock to Windows Phone?

    You mean, the same guys who struggled for years to make a profit from Microsoft’s mobile dreck…and still do? The ones who keep reducing their WP commitment, year after year, and to MS’s great chagrin? The same guys whose sales and profits have soared, under Android leaving HTC and Samsung firmly among the top five ODMs, worldwide?

    And you figure they would even consider doing a 180, heading back into Redmond’s waiting arms? In your dictionary, “disillusioned” must be a misprint for “demented”.

    1. Depends if they have to pay more to use Android? Even Motorola was hedging its bets with rumoured development of their own in-house OS. They may not flock to Windows Phone, but they may want diversify their offerings further with perhaps WebOS?

    2. If profits have soared then why was Motorola up for sale?

      1. Why was Motorola up for sale when profits have soared? Why not? Before Motorola divided into Motorola Mobility and Motorola Solutions, it’s mobile business was NOT making a profit. Selling now at what is a peak for the still in tact mobile unit of the old Motorola makes business sense, especially when Motorola has taken its own patents as far as they can go without having its own operating system. Developing on top of Android has been problematic and Android will continue to face lawsuits, but the patents Motorola has will keep Android from many unforeseen patent assaults.

  14. So Google absorb Motorola’s losses. I suppose it’s just one less competitor for other Android device makers to worry about. Will be interesting to see how this plays out – will this add to Motorola’s brand in the public eye? What is also quite interesting is that Google appears to want to go it alone when it comes to patents (according to MSFT) and determined to kill their opponents (Yelp, Skyhook, Groupon etc).

    1. Google is going to continue to operate Motorola Mobile as a handset manufacturer, or so Larry Page is saying. It’s not a case of one less android competitor, but a failing, unprofitable competitor now being propped up by the Licensor. At the very least, this will give the other licensees pause.

  15. BARBIE OYUNLARI Monday, August 15, 2011

    Patent issue, they need patents..

  16. The impression I have of this entire business:
    -Apple has better products than Android, but the latter is gaining market share (48% to Apple’s 18% worldwide) in phones.
    -Apple is replaying its role of the 1980s when it didn’t license its OS, and Microsoft gained 90%+ market share. It is doing the same now with IOS. Apple has a jump on others through superior technology, but then all of the handset manufacturers pile into Android, which potentially can leave Apple in the dust, reliving the same experience as the 1980s for Apple. Some have estimated 75% market share for Android in the coming years. The same dynamic for tablets is likely to play out where Apple has 90% share now in these early days of these devices, which may completely reverse within 2-3 years
    -To defend its turf, Apple and its proxies are suing Google, by going after Samsung directly, and allowing Oracle’s Larry Ellison, a friend of Steve Jobs, to go after Google
    -By taking the route of suing to defend its turf, directly or through proxies, Apple forces Google to take some other approaches to its business model.
    -One is to purchase Motorola, which will give Google and Android an even stronger hand, solidifying the diffused Android platform by building a solid software-hardware integrated device, like Apple, but which then gives the dozens of other Android manufacturers a basis for creating even better devices than they are currently making.
    -Each attempt of Apple to defend its technology through direct and proxy suits, will cause a negative reaction through positive developments for Android. I feel this is the “karma” of things.
    -I use Apple products, not Google because they are better and easier to use. But that won’t hold up if there are many more choices in the future through the Google platform. If Apple takes the same approach, I will be forced to move to Android, as I was forced to do in the 1980s when the reality of the situation forced me from Apple to PCs, which then and now still dominate that environment through Windows.
    -This can change if Apple opens its platform up, something it is unlikely to do under Jobs, but is possible in a post Jobs Apple. If not, Apple will begin become a niche player, as it has made the same mistake twice.

    1. Apple don’t need to open up iOS, and I hope they don’t. Yes Apple has what, 9% share of the PC market? But yet they make the most profits. I think it will be the same in the smartphone market – every single ODM will be competing against each other and Apple and RIM and Nokia etc. Look at the PC market right now, how is Dell doing compared to Apple? Marketshare does not equal success. Look at Nokia.

      1. Sure, apple knows that “apphole fanboys” will pay premium price to pick up whatever shit they dump.

    2. Just a couple of the major errors above:
      – Apple DID license its software to other manufacturers. It was a major fiasco
      – Yes, they are friends, but Steve Jobs did not ‘allow’ Larry Ellison to sue Google. I can assure you that Larry Ellison made that decision himself and did not ask permission from anyone else, even Steve Jobs.
      – Android tablets have completely failed to date because this market is not like the phone market, influenced by carriers, but like the MP3 market, where straight consumer preferences decide purchases. It’s more akin to iPod, where Apple maintains a massive share, than iPhone, where carriers trick consumers into buying Android knockoffs of iOS

      1. @Rurik I can see where u comming from. Don’t forget that the ASOP is less than 3 years old. Android users enthuse about the hardware sure enough, but what brings the hype in the user experience is the versitality of the OS. One would have thought that hardware is would definitely define performance alone I guess I wrong when Gingerbread came around. The next upgrade comin out this Q4 should not be underestimated…

    3. Roy,
      Since your response is bereft of context of facts, I thought I’d help you out.
      “…Android, …is gaining market share (48% to Apple’s 18% worldwide) in phones.
      What has happened is all the low end “smart phone” mobile makers have moved off of mobile java, and junky software of previous phones and have switched over, as the cost to move to Android is roughly $0. Despite this move, Google’s Android has failed to make any money for itself. As for the vendors, only Samsung has shown some profit. Here take a look at what Asymco has put together –> http://www.asymco.com
      
”Apple is replaying its role of the 1980s when it didn’t license its OS, and Microsoft gained 90%+ market share…”. Again, no context. Apple was never the market leader in the PC market. It was always a small market, but it had the potential to dominate. Sadly, licensing agreements made with Microsoft, made it impossible for Apple to defends it IP, which the courts sided with Microsoft, leave Apple with nothing to defend itself with.
      
”…Apple and its proxies are suing Google, by going after Samsung directly, and allowing Oracle’s Larry Ellison … to go after Google”. Huh! Apple went after the companies that are coping it’s IP. Samsung, Motorola, HTC, all decided to use Android, because they thought Google would step up and defend them. Guess what, Google didn’t. Ask this question, why not provide a statement to each Android vendor that you would indemnify them from any possible lawsuit? I’ll tell you why, cause Google took a short cut and new it could not defend itself against the charges of breaking other people’s IP. Take a look here –> http://www.pcworld.com/businesscenter/article/237319/judge_oks_google_email_about_licensing_java.html to see what they were up to.
      
”… Apple forces Google to take some other approaches to its business model.” The only approach Apple is taking, is to tell each phone vendor to leave it’s IP alone. Straight and to the point.
      
”…purchase Motorola, which will give Google and Android an even stronger hand … dozens of other Android manufacturers a basis for creating even better devices …”. How exactly, what patents does Motorola hold to defend against Apples claims? None, but if you have some proof, please provide. Second, this does nothing for the other phone makers, as to how it will protect them. As I asked before, is Google giving it’s licensees some sort of indemnification for lawsuits?
      
”… Apple to defend its technology … will cause a negative reaction through positive developments for Android…” Yup, Karma will help Android out. Nothing so far has show that Apple has lost it’s growth. On the contrary, all that has happened is that Android has swallowed up all the low hanging fruit, but has failed to slow Apple iPhone sales. Had Verizon not allowed the iPhone in it’s market, then it would have lost the title to having the largest smart phone users between AT&T/Verizon last quarter. As the iPhone has shown, it will eat into every smart phone maker, while still making a 30+% profit, everyone else is lucky to make over 3%
      “… I use Apple products, not Google because they are better and easier to use. But that won’t hold up if there are many more choices in the future …”. Everyone keeps praying/lamenting/babbling that the 80’s are going to happened all over again, but with Google playing the part. As the iPod, iPhone and now the iPad is showing, Apple is running on all cylinders. No one manages their inventory (which has been the key to it’s recent success) like Apple has over the last 10 years. They have made long term hardware deals that no one else can buy at or undercut them. Apple can sell the iPhone for $100 less and still walk away making more profit than anybody else. Before, you ask, Apple has no need to lower the price, because the market agrees that the value of the iPhone is priced right. That is why entrants to the iPad market by anybody else has been meet with a MEH.
      
”… Apple opens its platform up … If not, Apple will begin become a niche player …” No matter how much you wish this it will never, let me repeat, never happen. What Apple is saying is that if they make the whole widget, that there is a value in this. Apple has the OS that now runs on it’s various platform (music, TV, computer, phones) and this tight integration is where Apple is leveraging to provide value to it’s entire ecosystem, something that Android sorely has not been able to do.

      1. Apple made the whole widget on the Mac and it got annihilated in the market; still till this day IBM/Windows compatible 95%, Mac 5%, even if the latter is a better experience.
        It is true that the Android market has exploded as it has replaced up the schlock Symbian devices. However, the quality is bound to get better; just as Windows followed DOS, and was 95% as good as the Mac.
        Apple is the profit leader in phones, tablets by a mile, and the quality leader by a quarter mile. But Apple is way over-charging, as are the telcos. Android is spreading around the world like wildfire because of lower price and more choices.
        Apple is successful because Jobs is pushing himself and the company to the limit. He is bravely doing so on borrowed time. After he has left the company, there is bound to be issues.
        Jobs is bitter about Android because he knows he is subconsciously being overrun again.
        Apple will keep pushing into new markets, e.g. living room and beyond, and will always be ahead, as long as Jobs is around. In that sense they earn the high prices they charge.
        The world is moving to Android, as it is benefitting millions in poorer and mid-range nations. It is an explosion that most here in the US do not see. But we better open our eyes.
        Now with Motorola Google can build a solid “demo” device that other manufacturers can emulate. Parity with Apple in terms of quality is bound to happen.
        Apple will always do well because she pushes into new markets; yet at each point surrenders dominance of the previous ones she has created. That is happening with phones, and likely with tablets in a few years, beginning with Android 4 based devices.
        We love Steve because he pushes the envelope, and yet ironically enables the spectacular success of Microsoft and now Google.
        It is true that Apple opened up the Mac to other manufactures, but it was a pathetic, half-hearted gesture at a time Jobs was not there. Jobs killed it because it was pathetic. If serious, it could have changed Apple’s fortunes, and made Apple the dominant PC platform in the market, instead of its paltry success.
        In the end Steve is a very possessive person. On the one hand he speaks of an integrated product, which he is the master of. On the other hand he is unwilling to share in those jewels for whatever psychological reason. Maybe because he was an orphan. It is ironically what causes Apple to be great and then lose the following of the world.
        Google is emblematic of an open society where everyone contributes in a creative way. It is the way of the future.
        I love my Apple device, just as I loved the original Mac. But then I had to switch to Windows 95, and the whole world followed. Life is now repeating for Apple, but now in terms of Google.

      2. Wow, all that copy and paste just to protect the brand you so obviously live your life by.

        Too bad much of it is hoohah.

  17. Spreading themselves thinner, and thinner, and thinner…

  18. The real big loser here could be Windows/ Nokia , their game plan was to hope that the Android system would crash due to fragmataion and they could move in with their walled garden. Google is now faced with a bunch of issues
    What will the phone manufactures do now that Google will compete with them?
    Will Google create a walled garden and if so will developers stick.
    These are the important questions Google faces.
    Google has a long way to go to develop a smooth integrated system , never mind the culture clash and googles famous lack of focus.
    Then they face the biq question will they be contributing to the death of search as they know it by supporting Apples model and will they compete in search on the app platform vs net. What happens to chrome?

    1. I guess they’re out of money now.

      1. Oh they could easily raise $24 billion plus a 60% premium. But the point is, they don’t *want* Nokia – they would just force MS to formally acquire them instead.

  19. I really hope Google boys Motorola. Microsft monopoly is making the worls sicker :-(

  20. Note that Om sees everything from his sponsor Google’s perspective. Nothing about Google exercising horizontal monopoly leverage or selling its OS (and now, probably, handsets) at predatory prices so as to get Android — which spies on its users — into as many users’ phones as possible.

    No surprise, I guess; all of GigaOm is biased toward Google and its corporate agenda.

  21. steve crandall Monday, August 15, 2011

    The breakup fee is extraordinarily huge. That usually only happens when the buyer is desperate and/or the seller has enormous concerns about the likelihood of the deal going through.

    There is a lot of complexity here and it doesn’t make sense from a pure patent play.

  22. $12 billion is more than a few billion wasted

  23. Peter Kilburn Monday, August 15, 2011

    You obviously didn’t read the reports that say “the disillusioned handset makers” are all extremely happy about this. They even had comments from the top guys in all the companies……. come on Macboy….stop the BS reporting….

    1. You seem to forget that some of the best antitrust evidence against Microsoft came from Intel and HP who never wanted to provide such testimony and were completely afraid because they knew that a court battle would take years and that any decision could be toothless whereas any indications of push back, disagreement, or a desire to modify their current situation could produce immediate and painful reprisals from Microsoft.

      Positive comments from weak partners dependent on your good will are pretty easy to get; you can usually write them for them. In fact, that appears to be the case. But even in this case, they weren’t able to get too many variations for decent PR value sake.

  24. Given that most of Google’s hardware partners have come out applauding the sale I don’t think there’s going to be any negative fallout on Android.

  25. Will we see BING becoming the default Search Engine on iPhone?

  26. Windows Phone 7 is awesome. Windows 6.5 was a disaster but if I had to hand my Windows Phone 7 in for a Blackberry or Android phone I would be very very sad.

  27. A smart move by Google. They found a way to kill two birds with one stone. Not only have they acquired a solid patent portfolio, but also the Motorola’s contacts in the carrier industry.

  28. It’s a shame big companies would rather win in the courts than in the marketplace. MSFT hasn’t had an original idea since Bill Gates wrote BASIC.

    1. And Apple since………gee, never.

  29. Charlie Anzman Tuesday, August 16, 2011

    Somewhat dangerous on the PR front in a number of ways …. It’s highly unlikely that Google will absorb all of the Motorola employees. Potential short-term headlines not to mention some anti-Google sentiment

    1. Google will keep the IP and sell the handset unit to one of the Android partner, who can run it much more efficiently. Everyone will be happy except Motorola employees – expect huge layoffs.

  30. Google strength itself by buying patents and put itself in the ecosystem of apple as an manufacturer of hardware like mobile,STB and other consumer products & software .. They already have big portfolio of leading software products on internet which will Motorola devices adapt soon ..

  31. The buy is for #1 patents, #2 wired broadband platforms, #3 phone/tablet. $3B, $1B, $5.5B.
    Don’t be surprised if this division goes back into the market with an IPO 12 months after close of the deal. Win for Google, win for Android and partners will be calmed. Ofcourse Patents will be retained by Google

  32. The realm of patent creation is growing at an alarming rate. The current method of filing exposes the “secret” at the time of filing therefore creating the business of filing a “like” patent. This is not new business but is greatly aided by the USPTO’s philosophy.

  33. Why do people keep inferring that Android OEMs will jump on Microsoft’s bandwagon because Google owns Motorola? Microsoft now controls Nokia and Nokia will get the latest and greatest Phone 7 updates first. Remember, Nokia is laying off their own developers and going with Microsoft. Why would OEMs get involved with that?

  34. I think Google wants a tightly woven technology ecosystem, hardware and all just like Apple has.

  35. This was a no-brainer for the GOOG. They now have hardware control in many markets, namely the rapidly growing mobile space. Now, they will make an exclusive version of their own phone (like the iPhone) and increase competition across the ecosystem. I’m not a Google supporter but I have great respect for their urgency with this move.

  36. Why is no one mentioning Motorola’s presence in people’s living rooms and a potential path for Google to take over the homes with converged software and services?

  37. Google in their press release state quite clearly that Motorola Mobility will be run as a separate company and Android will continue to be developed as it is now. Meaning it will remain an open platform available to all handset makers.

    If anything I think the likes of HTC and Samsung will be quite happy about this deal. It means Google have taken a huge step towards being able to help them fend off malicious patent attacks from Microsoft, Apple and Oracle. So I just can’t see how the author comes to the conclusion this is an opportunity for Microsoft to recruit “disillusioned” hand set makers. Which hand set makers are “disillusioned” exactly?

    The OEMs currently pumping out Android handsets can’t do it fast enough. Every other month their are several new models being hyped up as the latest and greatest. Android owns the mobile market right now and it’s getting bigger all the time. Even RIM who have their own OS have incorporated Android application compatibility into their tablet.

  38. Major Plonquer Friday, August 19, 2011

    Two turkeys do not an eagle make.

  39. patent litigation Tuesday, August 23, 2011

    Although its entry into the patent-war big leagues didn’t start out very smoothly, perhaps Google is better off now with the IBM and Motorola portfolios than with the Nortel patents. It will certainly have more patents at its disposal now than if it had bid higher than Pi at the Nortel auction.
    http://www.washingtonpost.com/business/poltorak-says-nortel-auction-may-spark-patent-wars/2011/06/27/AGWzLWnH_video.html

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