Google to Buy Struggling Motorola Mobility

NEW YORK - August 15, 2011 -- Google agreeing today to buy Motorola Mobility Holdings Inc. for $12.5 billion gives the search giant a more significant direct involvement in the design and production of mobile phone hardware and shores up a valuable intellectual property portfolio during a time when legal maneuvering through patent holdings is plaguing the Android market.

A number of repercussions will result from this acquisition if it goes through. The Android platform is on its way to becoming the eventual leading OS in the smartphone market due to its wide OEM support. Does the growing support change for Android now that Google will be in direct competition with its licensees? Will the likes of Samsung, Huawei or even HTC adjust their strategies by emphasizing a competing platform? How will it affect Android future development? Android innovation relies on the contributions of its licensees, does it all freeze while this settles and how well can RIM and HP capitalize on this opportunity?

“Google has been relatively silent through the many legal problems its licensees have faced in defending Android,” says Kevin Burden, vice president and practice director, mobile networks. “All its licensees are now feeling their legal positions have just been reloaded, but their allegiance to Android may be more at risk.”

Beyond mobile phones and media tablets, Motorola Mobility has a healthy business in the digital home, namely broadband cable modems and set-top boxes. Its strategy has been to promote a “TV everywhere” solution. Google, in contrast, had its foray into this space with Google TV seen widely as an experiment. A tie-up between Google and Motorola could give Google the expertise it needs to be taken seriously and gain an eventual foothold in content deliver to the home.

ABI Research’s “Smartphone Technologies and Markets” study explores the leading IC and OS platforms and the outlook for these competing technologies. In addition, it examines technologies that are being integrated into smartphones as competitive differentiators by smartphone OEMs.

It is a component of the Smartphones & Mobile Devices Research Service.

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