Enterprise Mobility & Connected Devices Blog

Google to Acquire Motorola Mobility: A $12.5 Billion Patent Play?

Google's decision to purchase Motorola Mobility sent ripples through the wireless industry on August 15th. Although this move is clearly influenced by Google missing out on the recent Nortel IP sale, there are a number of interesting challenges and concerns for Google and its Android partners as a result of this transaction.

The IP Play: Patent infringement is a serious concern for Android supporters especially with recent reports of vendors paying up to $5 per device in royalties. Google's legal counsel has made it clear that Google intends to "protect the Android ecosystem" and is doing so by acquiring key patents - such as the 17,000 patents Motorola Mobility has been issued worldwide (and an additional 7,500 pending approval). Interestingly (from a timing perspective) Motorola Mobility's CEO Sanjay Jha made some very interesting recent comments about their patent portfolio and their ability as a Android supporter to not only avoid royalties but also be in position to collect them. To what extent will Motorola Mobility (under its new ownership) pursue other Android partners for royalty payments? Bottom line: while the company (and broader mobile industry) remains mired in patent lawsuits the key question is whether this acquisition is designed to be a defensive tactic for Google (to protect against patent lawsuits) or whether Google will actively pursue patent lawsuits/royalties. Put another way will this continue to fan the patent infringement flames or act as a collective calm? 

Android Partners Reaction: Is by virtue of this transaction Google validating Apple's appliance model? Although executives from all the major Android partners (Samsung, HTC, Sony Ericsson and LG) endorsed the acquisition their incredibly similar statements suggest that Google was behind all these quotes. Google has stated that it will be operating Motorola as a separate division and that Motorola will continue to license Android much like its other partners. Moreover, Motorola Mobility would need to compete with other vendors to receive the next Nexus contract. However, the promise of 'tighter' hardware and software integration between Android and Motorola's handsets will not leave other Android partners feeling too secure about their Android investments and many will likely accelerate their plans to evaluate alternate platforms. However, are they too invested in Android? Is it too late for them to make a change?

Impact on other vendors? There appears to be some silver lining here for Microsoft in that Android supporters may be more willing to invest in this platform (however, lacking substantial end user interest and developer support this appears to be a uphill battle). Conversely, this transaction and continued industry consolidation may be the proverbial straw that drives Microsoft to take the hardware leap (Nokia?). For RIM, there maybe some (perhaps short-lived) upside from the potential Android fallout. However, the bottom line for RIM is that until it fully transitions through BB 7.0 to QNX it continues to struggle attracting developers to invest in its platform. 

Enterprise play? Even with its leading smartphone share, Android continues to be the weakest enterprise mobile platform (in terms of security and device management capabilities and resources). Although this is likely to change - especially in light of many enterprise-focused hardware and software vendors investing in Android - this specific deal is not expected to have a major bearing on the enterprise market. Although Motorola Mobility has some legacy enterprise experience, most of that is now with Motorola Solutions. That said, Motorola Mobility has invested in some interesting enterprise solutions (3LM) that could find their way into a broader portfolio. 

Bottom line, this is a very interesting transaction. One which will likely cause a number of major mobile vendors to reevaluate their mobile investments, strategies and allegiances moving forward. 


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