Google buy Motorola for $12.5 billion
Big news in the tech world today as Google made a 63% overpayment compared to the closing price for Motorola Mobility on the New York Stock Exchange last Friday. Google appear to have successfully purchased the manufacturing arm of Motorola Solutions, the deal is however still subject to US regulatory approval.
Motorola patent portfolio:
With Google defending the Android operating system in courts, and losing out on Nortel’s massive patent portfolio the other month to a conglomerate of companies, it seems likely that buying Motorola mobility will help to potentially push back legal challenges in the future. Google did eventually acquire a host of IBM patents so could be looking quite comfortable now in their ability to fight legal battles related to technology patents. For google the truth is they have very little in the name of R&D on the manufacturing aspect of mobile and need to look to other companies to provide this expertise.
Google head to head with Apple and Nokia, Windows could benefit also:
Time will tell who or what will happen in the smartphone and tablet arena, but Windows may be happier knowing that some of Google’s current Android based manufacturers like Samsung and HTC may now start looking at Windows 7 and 8 as a real alternative to the Android O/S if they feel that their are issues with patents and an aggressive Trojan horse in the midst. Man its getting snake like in the mobile world of late!
Good time to sell for Motorola?
Is google looking to buy up patents and then sell these on and leave the manufacturing market then dissolve Motorola Mobility, who knows?
Mobile patents at a premium currently:
One thing is for certain though, with so many legal battles currently under way in the mobile world, and Apple and Google buying up IPR (intellectual property rights) in as many areas related to their core businesses, the actual value of these patents has risen enormously. On the advice of investor Carl Icahn, Motorola looked to sell off their patents after seemingly good advice was given earlier this year, yes you lost part of your company in the process but hey its been around for a while now (around 80 years) and may well never have as much value placed on it’s assets than is currently the state of play and you still get to keep Motorola Solutions, wise move me thinks.
As with any business deal, there were many ways Motorola could have sold off the rights to their patents but it would have got messy retaining rights to manufacture etc. This way is a nice clean break and allows all involved to get what they want out of the deal.
Rival manufacturers feel under threat now google are manufacturers?
It is not clear to what extent google will use the Motorola manufacturing capabilities and if they do to what extent the likes of Samsung and HTC will view this direct competition. Indeed it may be another legal issue if the monopolies commission (anti trust) finds that they are becoming a little too vertically integrated like their distant relations in the 1920’s and 30’s.
Google anti trust law suit the next legal battle?
Some of the products that Google could well be offering in the US in the coming months and years include:
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- Google Broadband – an all-in-one solution
- Google GPS
- Google TV/Google set-top box
- Google Voice home phones
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Having a huge manufacturer of set top boxes and a serious player in GPS navigational tools through Motonav, it only leaves Google to provide end to end internet services, which many will know they are looking at in Kansas City, with an ultra high speed connection service. So having a manufacturer of set top boxes under your belt can only ease things when it comes to R&D and costs in general….though does start to feel like Google are becoming something that many will find a little too all consuming, especially the US government if other US based firms have much to say about these developments, but all of this is fortune telling right now, we actually have no idea what Google are going to do with these newly bought patents.
What do you think of the take over? Aggressive or smart? And what do you think will be seen coming out of google now they have a manufacturer under their belt with Motorola’s weight and experience?
Anthony Munns