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Google to 'supercharge' Android with Moto buy

Posted: 16 Aug 2011     Print Version  Bookmark and Share

Keywords:handset  Mobility  Android 

Google Inc.'s bid to buy Motorola Mobility Holdings seen as the boldest and most ambitious step yet into the mobile handset space. Google says it has signed a definitive agreement to buy the handset vendor for Rs.56,053.81 crore ($12.5 billion).

Google (Mountain View, Calif.) said it would pay Rs.1,793.72 ($40) per share for Motorola Mobility, a premium of 63 per cent over the handset makers Aug. 12 closing price of Rs.1,097.31 ($24.47). Motorola Mobility's stock surged up 56 per cent in early afternoon trading Monday on the news.

Google said the acquisition of Motorola Mobility, a member of the Android Open Handset Alliance, would enable Google to "supercharge" the Android ecosystem and enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open, Google said. Google will run Motorola Mobility as a separate business, Google said.

"Motorola Mobility's total commitment to Android has created a natural fit for our two companies," said Larry Page, Google co-founder and CEO, in a statement. "Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers."

In a blog posting, Page said the acquisition would strengthen Google's patent portfolio, enabling the firm to better protect Android from "anti-competitive threats from Microsoft, Apple and other companies." Page noted that Microsoft and Apple last month led a consortium of companies that banded together to buy a load of patents from Nortel Networks Corp. for Rs.20,179.37 crore ($4.5 billion). Google claims this acquisition is part of anti-competitive behaviour meant to squash the growth of the Android operating system, which is now the leading smartphone OS, found in 48 per cent of smartphones in the second quarter, according to market research firm Canalys Ltd.

Google initially bit Rs.4,035.87 crore ($900 million) for the Nortel patents. Some analysts have said Google is in desperate need of patents. There are reportedly more than 45 patent infringement lawsuits against Android and makers of Android devices.

Motorola Mobility currently holds 24,500 approved and pending patents around the world. These include 14,600 approved and 6,700 pending patents held by its Mobile Devices unit covering key industry wireless standards including 4G and near-field communications. Together, this treasure trove could aid Google in defending itself in on-going intellectual property fights with rival mobile device developers.

"From an intellectual property standpoint, the acquisition bolsters Google's negotiating position with Apple, in the event that Apple goes after Android-based products the same way it did with Samsung in Europe," said Francis Sideco, principal analyst for wireless communications at market research firm IHS iSuppli. "If nothing else, Google will be able to assert Motorola's IP for the 3GPP and 3GPP2 cell phone specifications, which are used in both the iPhone and iPad."

Apple has filed patent infringement lawsuits against Samsung, claiming that Samsung's Galaxy media tablets and smartphones copy the design of Apple products. Last week, a European Union judge granted an Apple request to temporarily halt the sale of Samsung's Galaxy Tab 10.1 in most of Europe.

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