Industry-watchers divided on Googorola’s impact

Google Inc.’s $12.5-billion purchase of handset maker Motorola Mobility Inc. on Monday caught many industry-watchers by surprise, and divided them over what impact the biggest mobile acquisition ever would have on the smart phone market.
One thing they’re almost unanimous on, though: this buy is about patents, not hardware.
Founder Larry Page himself chimed in on the Google Offical blog, recalling patent-based legal woes and “anti-competitive threats” from Microsoft Corp. and Apple Inc.
“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will better enable us to protect Android from anti-competitive attacks from Microsoft, Apple and other comanies,” he wrote.
Om Malik, on GigaOm, cites source that said Google wasn’t the only one at Motorola’s table, and the company didn’t have much choice but to eat. Microsoft was also sniffing around, recent deal with Nokia Corp. notwithstanding.
“Microsoft was interested in acquiring Motorola’s patent portfolio that would have allowed it to torpedo Android even further,” he wrote. “The possibility of that deal brought Google to the neghotiation table, resulting in the blockbuster sale.”
We are talking here about 24,500 patents and patents pending, after all, and Google like still has a sour taste in its mouth after Apple, Microsoft and Waterloo, Ont.-based Research in Motion Ltd. snatched up Nortel Networls Corp.’s patent portfolio in a recent auction, wrote Adam Clark Estes on the Atlantic Wire.

“Last month, a consortium of companies including Apple, Microsoft and Research in Motion beat Google in an auction and purchased Nortel’s portfolio of 6,000 patents for $4.5 billion,” he wrote. “With 24,000 patents, Motorola Mobility’s portfolio dwarfs that of Nortel’s, and the $12.5-billion all-cash price tag makes it seem like Google got a deal by comparison.”
There’s less unanimity about whether Google actually wants to be a hardware maker (I’m guessing no) and what the buy does to the wireless competitive landscape.
“Of all the bad news hitting Windows Phone lately, (this acquisition) may be the worst,” blogged Preston Gralla on ComputerWorld U.S.’s Seeing Through Windows blog. Microsoft was looking for help from Motorola to salvage its struggling smart phone operating system, fearing the partnership with Nokia would not be enough to do it single-handedly, he wrote. “The chances of Motorola making Windows Phone 7 devices just plummeted, if not vanished. And even if Motorola ever did manufacture a Windows Phone 7 device, fearing an anti-trust look from the feds if it didn’t, it wouldn’t pour any significant resources into the device or marketing it.”
 “(Analysts say that) with Google’s cash and software expertise, Motorola Mobility may present a direct challenge to RIMM in the corporate market, the latter’s traditional stronghold,” according to the blog. “They state that this challenge may force RIMM to strike an alliance with another company or sell itself to remain competitive.”

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Dave Webb
Dave Webb
Dave Webb is a freelance editor and writer. A veteran journalist of more than 20 years' experience (15 of them in technology), he has held senior editorial positions with a number of technology publications. He was honoured with an Andersen Consulting Award for Excellence in Business Journalism in 2000, and several Canadian Online Publishing Awards as part of the ComputerWorld Canada team.

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