We know the mobile industry has been hot with applications, services, and new products – but the industry just went to inferno hot with Google’s $12.5-billion acquisition of Motorola Mobility.
Motorola’s stock is now skyrocketing on the news. Interestingly Google’s has actually dropped 3%, but this may just indicate the newness of the deal and some investor skepticism as to how Google can make this work.
Why would they do it you may be wondering. Well “patent wars” for starters. Microsoft and Apple, who have been devouring Android in court battles based on patent infringements. With this acquisition, Google gains Motorola’s war chest of over 20,000 patents and will now be able to hold its own.
Google CEO Larry Page states, “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.”
In addition, the acquisition of Motorola Mobility gives Google ownership of a hardware platform. This opens up tremendous leverage for additional lines of product revenue. This will be vital as “mobile commerce” grows and consumers make more purchases via their mobile devices. Retailers will also need a hardware solution to provide security, integration and data transmission. Google has now strategically positioned itself to be a major player and possibly even uber innovator in the intensifying mobile wars. Hint, Motorola makes “IP set-top boxes,” or Net TV devices. It’s a market in which Google has so far failed to make a dent.