Newsletter August 2011
Google's recent purchase of Motorola's Mobility division is seen as a big step for the internet giant, especially as they reportedly paid a notable $12.5billion for a slice of the company.
Google already has the world's number one search engine and more recently ventured into being an operating system provider for smart phones (Android) so what exactly is it set to gain from this pricey deal?
One of the biggest problems with Android is the amount of older versions out there. Only a quarter of Android is the most modern 2.3 version with over half still using 2.2. This Motorola deal will mean that Google can update through Motorola and pressurise other manufacturers to do so to keep up. This is an excellent way of pushing the most modern Android out to consumers.
The most obvious advantage of the purchase is that Google now has full control over its own mobile phone manufacturer. This essentially gives it full tenure of a phone's development from the cradle to the grave, as it were. Google can now develop handsets and the operating systems in a similar way to Apple and the iPhone. This is a strong position to be in especially as they have also gained a wealth of knowledge from Motorola's years of phone making.
Forces Microsoft and RIM
By owning a mobile phone manufacturer in the same fashion as Apple, Google is forcing Microsoft to show its hand a little, proving there are nowhere near as many benefits in creating third party software for phones as there is in having complete control. This new deal will allow Google to create cheaper handsets as they now work in conjunction with a manufacturer and so fewer resources are wasted. In light of this, Microsoft's Nokia deal doesn't quite look as cosy anymore, and as for RIM – the Canadian telecommunication company behind the Blackberry – they appear to have altogether been left by the wayside.
Mobility come with more patents for new technology than you can shake a stick at. Patents mean a number of things: Google now has a number of new ideas ready and patented for use in its already substantial bag of tricks. This will also mean that you have a number of patents should you be sued for intelligence theft – a very common thing in the tech world these days, look at Samsung and Apple for an example. Finally, a patent also means you can sell your ideas and make money from the utilisation of them by others. Numerous companies currently do this with Google even paying money to Microsoft for crucial parts of its Android operating system for this very reason.
One of the overlooked factors of the deal is the fact that Motorola Mobility's section creates a number of other products, including a sizeable amount of set top boxes for TVs. Through the acquisition Google can now enter millions of living rooms throughout the world alongside the stronghold it already has through the PC.