Google acquiring Motorola Mobility for $12.5B

In a surprise move, Google has announced that it will be acquiring the entirety of Motorola Mobility. Larry Page, CEO of Google, announced the acquisition via the Official Google Blog, and claims that Motorola will help “supercharge Android.”

The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences. I am confident that these great experiences will create huge value for shareholders.

The acquisition will be costing Google around $40 per share for a grand total of $12.5 billion, and was unanimously approved by the board of directors of both companies. Sanjay Jha, CEO of Motorola Mobility, stated that the transaction “offers significant value for [our] stockholders” and that the company will be able to do even more to innovate with the Android platform at hand. The transaction is expected to close in late 2011/early 2012 after it receives the approval of regulators and shareholders.

Google plans to operate Motorola Mobility as a separate entity and will not amalgamate the mobile phone manufacturer into the Google services branding, but naturally you would expect the company to focus solely on producing Android-powered devices. Google also stated that Motorola will remain a licensee of Android and that the OS “will remain open.”

Also, as Google has completely bought Motorola Mobility, there is little chance that the company will be seeking a Nokia-like deal to produce Windows Phones, as previously reported. Furthermore, this deal will not affect the other Motorola brand, Motorola Solutions; one of the two products of the Motorola company split early this year.

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Sorry Nokia and Microsoft, but this move is really interesting, what I am waiting for is how beauty will be the next generations of Motorola's phones under Google's lead.

I wonder if Google will push out updates to Motorola devices if we choose not to use moto blur, and perhaps get us a fix for the stupid efuze and rsa2048 encryption.

The Moto-deal is interesting in an another way too. They make Atrix, a device which has a unique capability of doubling up as 'PC'. If Google takes this, and makes it a part of all high-end Android devices, it would be great.
And 'great' is an understatement.

Oh noes, Microsoft will now have to make WP7 a success, as this sounds like the end of using their patent portfolio to extort money from Android handset manufacturers.

dotf said,
Oh noes, Microsoft will now have to make WP7 a success, as this sounds like the end of using their patent portfolio to extort money from Android handset manufacturers.
+100

Wow this is a shock. Just days ago Motorola was (sarcastically) asking for a Nokia like handout from MS. Not the kind of press I would expect from a company close to closing a takeover deal. Maybe it was a decoy to not get the shareholders excited that a takeover was immenent.

Huge win for Google. They have bought some teeth to fight the patent wars. I thought that there were more likely to buy RIM to get a slice of RIM-Apple-Microsoft-Sony's Nortel patents that were bought to be used against them.

Simon- said,
Wow this is a shock. Just days ago Motorola was (sarcastically) asking for a Nokia like handout from MS. Not the kind of press I would expect from a company close to closing a takeover deal. Maybe it was a decoy to not get the shareholders excited that a takeover was immenent.

Huge win for Google. They have bought some teeth to fight the patent wars. I thought that there were more likely to buy RIM to get a slice of RIM-Apple-Microsoft-Sony's Nortel patents that were bought to be used against them.

They were probably at a point where they were about to break off talks and they wanted get Google to think they were seriously going to consider the other option if they weren't willing to put up the money.

Warzone said,
Though it was the only move they could make after losing out on the Nortel patents.

or maybe they did not because they were already planning the buyout......

Folks, don't get all too excited about this. This is not a bad move from Google. Granted, the first sign of this buyout is that Motorola will have an upper advantage, but this is more about purchasing 17,000 patents that Motorola Mobility owns; hence avoiding lawsuits.

In addition, it doesn't mean that HTC, Samsung, and other android manufacturers will be forgotten. In fact, they will get the android version that has Motorola technologies in it, replacing the infringing technologies, and avoid paying Microsoft $10 - $15 per device.

deep1234 said,
How about Microsoft buys Nokia? Maybe also Blackberry? things will be interesting after that.

Microsoft has seen little success in the hardware market. They fancy themselves as a software company. Once the board of directors split RIM in two, then I can see MS making a bid on RIM Network. (PS Blackberry's are made by RIM)

dotf said,

Microsoft has seen little success in the hardware market. They fancy themselves as a software company. Once the board of directors split RIM in two, then I can see MS making a bid on RIM Network. (PS Blackberry's are made by RIM)

Actually it is not that MS does not make good hardware: I have used MS mice and keyboards for years and they are excellent; I also used MS routers and other WiFi devices before they decided to kill the line, prematurily in my opinion, and again they were excellent.
It seems to me that MS does not want to make hardware, not that the company is not capable. Maybe because they could think that to be seen as a software/hardware company could weak in some way their image. I do not know the reason and to be honest it s something that always puzzled me.

Yes you could mention Zune devices but again the hardware was really good but not aggressively marketed and supported.

Motorola was looking for alternative, but Google didn't wanted to loose a major partner.

However, But I think, this move can go in favor of WP7...Google-Motorola will be making all flagship phones, so HTC, Samsung and Dell may push WP7 to fight against them.

Instead of increasing Market Competition, this deal will increase competition between Google Partner (or Andriod Hanset Makers)......thus reducing margins siginificantly.......so they may look for other alternatives....and WP7 is perhaps the only viable option....

Gaurav Agrawal said,
Motorola was looking for alternative, but Google didn't wanted to loose a major partner.

However, But I think, this move can go in favor of WP7...Google-Motorola will be making all flagship phones, so HTC, Samsung and Dell may push WP7 to fight against them.

Instead of increasing Market Competition, this deal will increase competition between Google Partner (or Andriod Hanset Makers)......thus reducing margins siginificantly.......so they may look for other alternatives....and WP7 is perhaps the only viable option....

What makes you so sure of that? Sure, Google COULD do that, but then they'd attract quite a lot of antitrust flak because of it. I think Google will want to prove to the other manufacturers that they're not at risk from this move and the best way to do that will be to give them the deals to get access to the latest Android Source code. I'd still expect the next flagship device (The Ice Cream Sandwich device) to be from LG or Samsung.

UndergroundWire said,
Best news I've heard this summer. So I wonder if WP7 has a chance now?

Why? Before the deal Moto wasn't making WP7 devices, after the deal they still won't be. How does that affect WP7's chances when they still have the same OEM's they had before this deal?

UndergroundWire said,
Best news I've heard this summer. So I wonder if WP7 has a chance now?

I'd be more curious to see how they do with this news about GPL non-compliance. So I wonder if Android has a chance now?

Max Norris said,

I'd be more curious to see how they do with this news about GPL non-compliance. So I wonder if Android has a chance now?

GPL non compliance? Hasn't Google share been going up since they said they weren't releasing the source code for Honeycomb. I applaud Google for not releasing the Honeycomb source code.

UndergroundWire said,
GPL non compliance? Hasn't Google share been going up since they said they weren't releasing the source code for Honeycomb. I applaud Google for not releasing the Honeycomb source code.

You're applauding Google for violating the licensing terms of the heart of their product? Wow, ok, so you're saying the whole open source movement is a great idea until it's inconvenient, then it's totally fine to flip them the finger and go proprietary just because they got the money to hire an army of lawyers. Essentially saying the higher the stock price, the lower the business ethics. Classy, you should post that over in the back page news thread about this too.

efjay said,

Why? Before the deal Moto wasn't making WP7 devices, after the deal they still won't be. How does that affect WP7's chances when they still have the same OEM's they had before this deal?

Well Motorola holds 17,000+ mobile patents. So the Android platform just got strong since this will no doubt be shared without fees to HTC, Samsung and whoever puts Android on their phones. This is a minor loss for WP7. Their is one less manufacturer that will make WP7.

For HTC and Samsung, it may be more profitable now to make more Google phones.

It was merely a question since no one really knows how this will play out. It seems people on this forum get offended easily when it comes to WP7 (not you, just people in general).

Max Norris said,

You're applauding Google for violating the licensing terms of the heart of their product? Wow, ok, so you're saying the whole open source movement is a great idea until it's inconvenient, then it's totally fine to flip them the finger and go proprietary just because they got the money to hire an army of lawyers. Essentially saying the higher the stock price, the lower the business ethics. Classy, you should post that over in the back page news thread about this too.

Wasn't this whole debate settled quite a while ago? The reason the source for HC wasn't released is that Google felt it would make the smartphone/tablet Android versions ambiguous and would result it a host of smartphones inappropriately running HC. Ice cream sandwich is set to merge the two which is where a variety of dev tools will also be released to make coding/app making across both form factors much simpler. Understandably it sucks for those wanting access to HC source now but if there is a justified reason behind their decision then surely they deserve some slack?

Max Norris said,

I'd be more curious to see how they do with this news about GPL non-compliance. So I wonder if Android has a chance now?

Google released the GPL'ed parts of Honeycomb quite some time ago. The parts of Android actually written by Google, are under the Apache license which gives the developer a choice in releasing the source or not releasing it.

Hollow.Droid said,

Wasn't this whole debate settled quite a while ago? The reason the source for HC wasn't released is that Google felt it would make the smartphone/tablet Android versions ambiguous and would result it a host of smartphones inappropriately running HC. Ice cream sandwich is set to merge the two which is where a variety of dev tools will also be released to make coding/app making across both form factors much simpler. Understandably it sucks for those wanting access to HC source now but if there is a justified reason behind their decision then surely they deserve some slack?

Exactly. If HC was released then manufacturers will place it on phones and ruin the Android experience thus hurting sales. To me HC is beta. I knew this buying my HC tablet. There are some issues that need to be resolved. I am happy with Google's decision not to release the entire source code.

SharpGreen said,

Google released the GPL'ed parts of Honeycomb quite some time ago. The parts of Android actually written by Google, are under the Apache license which gives the developer a choice in releasing the source or not releasing it.

Yes, I did read that on the XDA forums. And yes HC is licensed under OSL 3.0. http://www.opensource.org/licenses/OSL-3.0

I just don't understand why Max is making an issue of something so old and resolved? Oh well, haters gotta hate.

I'd say this is probably the most significant thing to happen to Android since it was first released all those years ago.

The Stark said,
Look at the statements from Sony Ericsson and LG CEOs. They're identical: http://www.google.com/press/motorola/quotes/

What's wrong with that it would be like neowin responding to engadget posting news it would be about 1 sentence of typical wording since they are more interested in competition which this brings in a positive light more then anything.

Digitalx said,

What's wrong with that it would be like neowin responding to engadget posting news it would be about 1 sentence of typical wording since they are more interested in competition which this brings in a positive light more then anything.

Nothing wrong; it might means that thy had a heads up about the deal though. Again might be......

well hopefully it'll put 2 things on the back burner, 1 motoblur and 2, TI processors.

hopefully google absorb them too and don't just have it as an independent functioning wing of the company.

Digitalx said,
well hopefully it'll put 2 things on the back burner, 1 motoblur and 2, TI processors.

What's wrong with TI processors and why would Google choose not to use them?

Good for MS. Now other OEM's will be looking at WP7 a lot more seriosuly now that Android's got its Alpha hadrware partner

guru said,
Good for MS. Now other OEM's will be looking at WP7 a lot more seriosuly now that Android's got its Alpha hadrware partner
All Android OEM's can customize to their heart's content. This acquisition doesn't change anything for Android OEMs other than providing them with more protection. WP7 is the one that disallows OEM customization for all OEMs except Nokia. LOL. Your post fails.

guru said,
Good for MS. Now other OEM's will be looking at WP7 a lot more seriosuly now that Android's got its Alpha hadrware partner

Why so? MS alliance with Nokia, if the former will not try to buy latter, makes WP7 and successors OSes in the same situation for Samsung, HTC etc.

dogmai79 said,
First thought was Microsoft buy HTC. HP bought theirs, Google gets theirs, will Microsoft get theirs too?

Why would MS want HTC? They'll just buy Nokia.

The Stark said,

Why would MS want HTC? They'll just buy Nokia.

They pretty much already have them don't they? Keeping that agreement with Nokia and buying HTC would make more sense.

Johannsa said,
Next move is Microsoft to partially or wholly acquire Nokia mobile division?
I'd rather Blackberry or HTC.

Johannsa said,
Next move is Microsoft to partially or wholly acquire Nokia mobile division?

Sounds nice but not sure it will happen. Steve Ballmer wants to keep Microsoft has close to a pure software company as he can. Ditching Zune devices was part of that stragety, however, mobile devices are the future so there is a chance Steve Ballmer could change his mind. Then again, Microsoft partners have a history of screaming bloody murder whenever Microsoft enters sandbox they haven't played in before but I don't see any anti-trust issues with MS purchasing Nokia.

FMH said,
I'd rather Blackberry or HTC.

I think that HTC would be a too big prey both for MS or Google.Blackberry on the other hands is cheaper and the shareholders would be more prone to accept the deal.
Said that re-inventing the company image would not be an easy task.....

My say is that they bought it just to keep the "Nokia-like" deal away from them.

It would have been another victory for Microsoft. Nokia, Skype and than Motorola.

FMH said,
My say is that they bought it just to keep the "Nokia-like" deal away from them.

It would have been another victory for Microsoft. Nokia, Skype and than Motorola.

That implies that Google would expect to lose more than $12Billion if Motorola started making Windows phones. I think there's more to it than that off-the-cuff comment.

Kushan said,

That implies that Google would expect to lose more than $12Billion if Motorola started making Windows phones. I think there's more to it than that off-the-cuff comment.


-Oracle sued Google for $5.9 billion
-Android is expected to become a billion dollar business for Microsoft by the end of this year
-550,000 devices sold everyday. Microsoft and others want a cut from every device. Example Samsung pays $15.
-There are several anti-trust complaints against Android. If proven, Google could face huge sum of fines.
-IDC expects Android to ship in well over a billion handsets a year

You do the maths.

FMH said,

-Oracle sued Google for $5.9 billion
-Android is expected to become a billion dollar business for Microsoft by the end of this year
-550,000 devices sold everyday. Microsoft and others want a cut from every device. Example Samsung pays $15.
-There are several anti-trust complaints against Android. If proven, Google could face huge sum of fines.
-IDC expects Android to ship in well over a billion handsets a year

You do the maths.

What has any of that got to do with Motorola making Windows phones, which is what you originally said was the sole purpose of this deal?

Kushan said,

What has any of that got to do with Motorola making Windows phones, which is what you originally said was the sole purpose of this deal?

I was replying to your second reply. The first sentence.
That implies that Google would expect to lose more than $12Billion if Motorola started making Windows phones. (...)

How this Android "protection" is worth $12 billion.

FMH said,
I was replying to your second reply. The first sentence.

How this Android "protection" is worth $12 billion.

Why would you do that? My entire response was directed towards your statement -

FMH said,
My say is that they bought it just to keep the "Nokia-like" deal away from them.

You then respond with reasons that have nothing to do with this? I'm not sure if you're disagreeing with me or your own argument.

Kushan said,

Why would you do that? My entire response was directed towards your statement -

You then respond with reasons that have nothing to do with this? I'm not sure if you're disagreeing with me or your own argument.

Well I believe there are two reasons that justify this purchase. Patents & no-WP7. (As I said in the original post: http://www.neowin.net/forum/to...a-mobility-for-125-billion/ )

I only mentioned one. But you said something which my statement did not imply in any sense:

That implies that Google would expect to lose more than $12Billion

So I gave you reasons, for my second reason. So we both were partially wrong.

Kushan said,

What has any of that got to do with Motorola making Windows phones, which is what you originally said was the sole purpose of this deal?

Google's purchase of MotoMo is purely a strategic move. This purchase helps to protect Android and handset manufacturers that sell Android on their devices. If Google thinks MotoMo COULD get a Nokia deal with MS (and I doubt it myself); it would present an opportunity for WP7 to eat into Android's market share. In addition, Google getting its hands on MotoMo's patents helps to further protect Android from lawsuites currently directed at Android handset manufacturers.

FMH said,

Well I believe there are two reasons that justify this purchase. Patents & no-WP7. (As I said in the original post: http://www.neowin.net/forum/to...a-mobility-for-125-billion/ )

Well, do not forget the impact for the Android ecosystem: with Google/ Motorola selling devices HTC, Samsung etc. will have to release more timely updates to their devices which will strenght the Android brand and also be very good for customers.

I only mentioned one. But you said something which my statement did not imply in any sense:


So I gave you reasons, for my second reason. So we both were partially wrong.

However another device maker that could get a similar deal is Sony Erricson. Sony and especially Erricson have too large a patent portfolio, for words. Plus, things are not very bright for them in recent times. They are lagging behind HTC and Samsung.

And Fritzly your comment is not showing.

FMH said,
However another device maker that could get a similar deal is Sony Erricson. Sony and especially Erricson have too large a patent portfolio, for words. Plus, things are not very bright for them in recent times. They are lagging behind HTC and Samsung.

And Fritzly your comment is not showing.

Thanks I just noted it too.
Neowin please fix these issues: if I try to edit a post all the text disappears, sometimes the blinking cursor disappears or is frozen, etc. etc.
Thanks
Anyway that was my comment:

Well, do not forget the impact for the Android ecosystem: with Google/ Motorola selling devices HTC, Samsung etc. will have to release more timely updates to their devices which will strenght the Android brand and also be very good for customers.

Now do not ask me why my comment got embedded in your one because i have no idea.........:-)

Three thoughts: 1) Well, I guess that's how they plan to help defend Motorola against the lawsuits, 2) Wonder how HTC, Samsung, etc feel about licensing android from the owner of a major competitor? and 3) Wonder what kind of antitrust investigations can come of this if Android is the dominant player and they own one of their major manufacturers.

Interesting, interesting...

nowimnothing said,
Three thoughts: 1) Well, I guess that's how they plan to help defend Motorola against the lawsuits, 2) Wonder how HTC, Samsung, etc feel about licensing android from the owner of a major competitor? and 3) Wonder what kind of antitrust investigations can come of this if Android is the dominant player and they own one of their major manufacturers.

Interesting, interesting...

I think for the first point it's probably the other way round, that Google hope to make use of the Motorola Patent portfolio to defend themselves against the recent patent litigations.

nowimnothing said,
Three thoughts: 1) Well, I guess that's how they plan to help defend Motorola against the lawsuits, 2) Wonder how HTC, Samsung, etc feel about licensing android from the owner of a major competitor? and 3) Wonder what kind of antitrust investigations can come of this if Android is the dominant player and they own one of their major manufacturers.

Interesting, interesting...

I like your second point the most. It will be very interesting to see how other Android partners view their prospects ESPECIALLY if WP7 takes off. If that happens Google will no doubt give MotoMo priority over partners.

Hollow.Droid said,

Not really, check this article on Phandroid:

http://phandroid.com/2011/08/1...uisition-everyone-approves/

Seems all the major OEMs are fully behind this move, especially if it means less royalties on their end.

Thats not saying much of anything. Google's current partners can say anything they want NOW but its what they do in the future that is the true measure of their allegiance to Google and vice versa.

NPGMBR said,

I like your second point the most. It will be very interesting to see how other Android partners view their prospects ESPECIALLY if WP7 takes off. If that happens Google will no doubt give MotoMo priority over partners.

The same could be said about MS and Nokia; the big difference is that Android has arounf 45% of the market and WP7 1.5%

Everyone approves, and they all have only one brain to share among the four of them!


Samsung: "... Google's deep commitment to defending Android, its partners, and the ecosystem."

HTC: "... deeply committed to defending Android, its partners, and the entire ecosystem."

Sony Ericsson: "... Google‘s commitment to defending Android and its partners."

LG: "... Google‘s commitment to defending Android and its partners."

Gee, I wonder if maybe Google's PR department contacted their counterparts at the hardware makers and asked, "Is it OK if we have your CEO say a bunch of talking points about our commitment to defend Android, its partners, and the ecosystem?"

And they said, "OK, but copy it out in your own handwriting. And change some of the words around."

Nah, couldn't be. All four of those CEOs must have come up with that phrasing completely independently, of their own volition.

NPGMBR said,

Thats not saying much of anything. Google's current partners can say anything they want NOW but its what they do in the future that is the true measure of their allegiance to Google and vice versa.

Actually Andy Rubin stated today that Motorola will get no preference when it comes to the Nexus range of devices. Currently the Nexus phones seem to be the only way of judging allegiance but with Googles wide range of choice with HTC for the Nexus One, Samsung for the Nexus S and Motorola for the Honeycomb launch they currently seem unbiased. Obviously allegiances may change but I think HTC, Samsung, LG, SE etc realise they're onto a winner with Android and won't do too much to harm their current approach. They can simply keep hashing out a range of devices while sales continue to increase. I wouldn't imagine that they would ditch all this in favour of a much less mature and (Hardware/Software restrictions put in place by MS) restrictive OS as in WP7.

TomJones said,
Everyone approves, and they all have only one brain to share among the four of them!

If anything it proves how inter-dependant they seem to be on this issue. Stock wise it also makes sense for all involved to show a united front. Sure, their actual feelings may differ but if Google can maintain the seemingly friendly and open relationships with the above partners that this has shown then this decision is nothing but good. I guess we'll see in the coming months.

So, the next Flagship phone from Motorola? Nuuu O.o
Motorola back in the game, I guess. (The game being HTC and Samsung)

Ishanx said,
So, the next Flagship phone from Motorola? Nuuu O.o
Motorola back in the game, I guess. (The game being HTC and Samsung)

If I were a betting man, I'd wager that ZTE is about to make a huge impact as well. ZTE may as well be the new HTC.

Kushan said,

If I were a betting man, I'd wager that ZTE is about to make a huge impact as well. ZTE may as well be the new HTC.

Are you kidding? On what basis are you thinking that?

Bogdan Calapod said,

Are you kidding? On what basis are you thinking that?

On the basis that ZTE is operating right now much like HTC did a few years ago - offering unbranded phones that operators can brand however they like, such as the Orange San Francisco. Recently, they said that they plan to launch their own, branded, devices soon. Sure, people might not buy them, but if they can hit the right price/performance sweet spot, then there's no reason why they can't follow in HTC's footsteps.

Kushan said,

If I were a betting man, I'd wager that ZTE is about to make a huge impact as well. ZTE may as well be the new HTC.


I think so too. But it may take another two years.
I never would have thought that my Motorola MPx220 was actually made by HTC. But that was also a time when HTC was a premium brand, before they had flooded the market with Android phones from the lowest-end to the highest.
Today, ZTE seems poised to do the same. Perhaps we'll begin seeing ZTE branded devices this year, but it may take another year or two for that brand to become recognized as HTC began to be 5 or 6 years ago.

Its also a clever move by Google. By acquiring Motorola it also acquire the patents of Motorola which they can use to fight against Microsoft and Apple.... It should also be a better investment than the 4.5B Nortel deal since the price is only for the patents.
by the way Motorola has 24,000 patents that Google will acquire.