In its biggest ever deal, Google last week announced that it will acquire Motorola Mobility for about $12.5 billion. Officially, it was said that the acquisition of Motorola Mobility will boost the Android ecosystem and increase competitiveness in the mobile computing space.
Taking the official line forward, Andy Rubin, Senior Vice President of Mobile at Google, said, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”
With Apple on a patent acquisition path, it was high-time for Google to widen its patent portfolio. However, market watchers and analysts feel that it is more than just patents.
So, let’s look beyond patents and discuss other reasons for which Google may have acquired Motorola-
It is no secret that Google is eyeing the numero uno position in the mobile OS market. And may be, it has decided to beat Apple in its own game by making Android or a part of the Android ecosystem proprietary. Experts believe that in future, Android may offer better support to Motorola devices. It will also boost Google’s position in the Tablet market. However, Apple was able to gain from its proprietary status due to the early-mover advantage. And, RIM’s declining popularity may bring some cynicism in Apple-like strategy for Google. Moreover, other Android partners may be compelled to hedge their bets on other OS options.
Compete in the smartphone market-
Apple and RIM have shown that an integrated hardware/software company can reap rich dividends in the market. Google may use Motorola to position itself as a serious contender in the smartphone market. Motorola shipped over 8 million Android based smartphones and 700,000 tablets in the first half of this year. Last year, Motorola occupied 2.4% share of all mobile devices sold worldwide. Moreover, it is among top three handset manufacturers in the U.S. Motorola plus Google will become a strong force in the market and has the potential to give a strong fight to Apple, Nokia, RIM and others. And, the move may boost Android’s competitiveness in the OS landscape.
Last year, Google entered into the Home TV market by integrating TV viewing with its online search services. The attempt was not particularly successful. Motorola offers a similar TV viewing service through its set top boxes integrating social media with television. Google may use Motorola’s expertise and products to make a foray in Home TV space.
No doubt, the latest acquisition deal is set to become a game changer in the mobile computing space. How much will it help Google or how much Google will be able to leverage from it? Who will be the winners and losers? That’s to be seen in future.
For now that Google has direct control over Motorola devices, it will ensure that the devices are updated with the latest version of Android and are at the top of the game. This is bound to push other Android-powered device manufacturers like HTC and Samsung to try and catch up with Motorola resulting in overall improvement of the Android device quality in the market. So, as of now, mobile users with the likelihood of more competitive choices and Android seem to be the beneficiaries. Plus Motorola shareholders who laughed all the way to the bank with 65% premium over the closing stock price.