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The brief analyst call held by Google (NSDQ: GOOG) and Motorola (NYSE: MMI) Mobility around the acquisition news (our story here) gave little away in how the two companies would integrate operations, but Google CEO Larry Page and Motorola’s CEO Sanjay Jha were quick to point a few key details out: the patents form a big part of the deal. Android remains as it was. And Motorola’s Android competitors? They love the idea.
Patents: Motorola may be only number-eight in Gartner’s mobile handset rankings, but it remains one of the earliest movers in the space and a veritable titan when it comes to patents. Google will be buying 15,000 17,000 patents as part of the deal; and Motorola has another 7,500 pending.
Patents were mentioned within the opening minutes of the call, and were the subject of the very first questions from analysts. Not too much deal from Google on the application of the patents themselves. The basic message was that the patents will help “protect” Android.
Cases in point: Oracle is directly fighting Google on Android patents (David Drummond, chief legal counsel: “We believe that [Oracle has made] an ill-founded claim against Google.”). There are also a number of legal battles (and some expensive licensing deals to settle them) that involve handset makers that use the Android platform. And on a less titanic scale, there are potential lawsuits hitting developers who work with Android (such as the case being brought by Lodsys). The acquisition potentially gives Google some artillery in all those fights.
Android, Android partners: Patents may be why Page also noted that the top five Android licensees showed “enthusiastic support” for the deal. Google was quick to put out a release with quotes from four of them to support that. From Samsung’s Mobile head J.K. Shin: “We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners & ecosystem.”
Ultimately, it will depend on how the acquisition and future activities get played out: currently there are 115 million Android devices in the market, being made by some 39 different manufacturers. One of the big draws for Android handset makers up to now has been the royalty-free licenses and the ability to tweak the open-source code (or not, as the case may be).
Motorola integration, regulation: Page’s main message here was business as usual. “We expect no change in how we’re running Android,” he told listeners. Patrick Pichette, Google’s CFO, noted: “We will run Motorola as a separate business and provide separate reporting.”
And that separation, too, might be something Google was keen to emphasize in the frame of regulatory approval of the deal. Unsurprisingly, for now, the companies are “confident” the deal will get approved by regulators in the U.S., Europe and possible other jurisdictions, with Drummond calling the deal a “procompetitive transaction.” But ultimately that will be something for the regulators, rather than Google and Motorola, to decide.
Meanwhile, the markets and the Internet are now zooming with speculation about what this might all mean for the wider mobile competitive landscape. Nokia’s shares are creeping up, as people wonder if this increases the changes of Microsoft (NSDQ: MSFT) buying it; others are questioning whether Google is right to get into devices at this stage. It’s a story that is bound to run for a long time, and likely change the course of the mobile world with it.