Google SHOCK! Snaps up Motorola phone biz for $12.5bn

Google has made its largest-ever acquisition, and biggest corporate gamble, by splashing out $12.5bn for Motorola's phone division, Motorola Mobility. The deal puts Google into the hardware business in a serious way – and into direct competition with licensees of its Android operating system, who woke up this morning thinking …

[Arctic fox]

Interesting that Google has chosen such a strategy.

They could have for their own version of the alliance between Nokia and MS. The fact that they did not and have gone for a complete buyout at a premium price per share suggests very strongly that Moto's IP portfolio was indeed a key element in this deal.

[D. Suse]

Intelligent, defensive strategy

Yes, Google needed something to fend of the nastiness of Apple + Microsoft patent attacks.

No one ever accused The Reg of being a reputable, neutral IT rag, but all the venom and instant-negativity of this article seems more than a little biased. Google has shared its wealth, innovation, and IP in the past (for example: Android, VP8, web services, open source projects, and their web advertising exposure has helped may companies grow), they have done very well as a result of this, so it seems reasonable to expect that they will continue to behave this way, as a good corporate citizen should. If they said they will use their patents to help others, that is probably exactly what they will do.

On the other hand, the "proprietary twins" (Apple & Microsoft) seem intent on killing off every other corporation (including each other) with their constant patent threats and anticompetitive lawsuits. However, it is kind of funny to watch them trying to "band together" against Google (contrary to their natural predatory instincts). Just imagine how hard it must be for Jobs or Ballmer to mouth the words "trust" and "cooperate".

So, unless Apple and Microsoft are paying the bills, perhaps the Reg could give Google the benefit of the doubt, or at least write articles from a slightly less biased viewpoint?

[N13L5]

yeah, that article seemed a bit over the top

though Google has been really sloppy about the patent law issues.

Of course patent law is a childish mess, but that's the mafia-rule of the land, so unless you're in blessed asia, you can't ignore it

Well, if vendor interest for Android really does implode, I hope vendors like Samsung, HTC, Sony, are moving to MeeGo, and not crappy M$ windphone, or else, I'll be forced to get out of smartphones alltogether with only the choice of walled garden and walled ghetto.

[Joe K]

They know

Oh those partners have been briefed with exactly what to say, its no surprise:

Peter Chou, CEO, HTC:

We welcome the news of today's acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.

Bert Nordberg, President & CEO, Sony Ericsson:

I welcome Google's commitment to defending Android and its partners.

Jong-Seok Park, President & CEO, LG:

We welcome Google's commitment to defending Android and its partners.

[Anonymous Coward]

"defending Android and its partners"

Defending its partners? What with? a jolly good shafting...

[Patrick O'Reilly]

With lots and lots of patents

Motorola pretty much invented modern mobile telephony, hence must hold a bunch of critical patents.

[Anonymous Coward]

mobile telephony patents

Question is, do the significant patent threats to Android come from mobile telephony IP space or from elsewhere (e.g. Oracle and Java).

It would be tempting to assume that Google have thought about this and that their Moto purchase ("thanks for all that IP chaps, close the door on your way out, kthxbye") reflects their need for a big bat in the upcoming patent deathmatch. But then again.

[Lance 3]

Not really

No they didn't. They were the last in the digital era and their first release was a failure; one carrier sold it and pulled it shortly thereafter. All the other carriers is failed to pass the network tests. They were also late to the smartphone market as well. See a theme there? They are not innovators and focused on analog and then CDMA. They have done very little to truly modern mobile telephony.

[Thomas 4]

I know!

They could all sign up for Meego....oh wait....

This is somewhat troubling news. My Nexus One is a faithful and solid little beastie - not the fastest but never crashes. My next phone will probably be a Nexus S. My first Android phone was the Motorola Milestone and the build quality was lacking to say the least. Not sure how well it will bode for Google's supposed flagship range if it's being made by the same people.

[AdamWill]

"oh wait" what?

Meego is the angle I thought of. I dunno what your "oh wait" was - Nokia dropped out, but Meego's still running. Admittedly mostly from an IVI and tablet angle, but this could well give at least one other major handset manufacturer sufficient incentive to crash the Meego party.

[BillG]

Defending Android and its partners???

Defending Android and its partners??? Not very likely.

Based on Google's recent behavior, Yes, Google will defend Android - but only at Motorola.

LG, Sony, et all will get the short end in the form of late releases. Of course, Android firmware engineers that sit down with rivals can pass on their phone plans on to Motorola.

What OS will everyone else go with now?

(Microsoft enters Stage Left)

[DrXym]

I expect it boils down to this

HTC et al are getting picked off one by one because Microsoft / Apple can threaten them with patent lawsuits and their partner Google hasn't got much to throw back the other way. By buying Motorola they would have a veritable raft of patents that they can fight back with. So it affords some protection to everyone in the Android camp.

I don't know what Motorola aside from patents has to offer Google. I joked the other day that Nokia and Motorola should merge so they could fail everywhere. Motorola really is a has-been provider in Europe and foundering elsewhere. It's kit is uninspiring and/or very expensive and the lack of updates is frequently commented on. Maybe Google intend to use them for Google branded phones and tablets and it's therefore seen a good fit for the long term.

[Anonymous Coward]

Translation

"I, for one, welcome our new chocolate factory overlords."

[Anonymous Coward]

Meanwhile back at headquarters ...

The CTOs are busy figuring out which platform to move to in the next year or so as Google completely takes over the Android handset market.

Really, who would want to build Android devices to go up against Google's own Android devices? This could actually end up killing Android in the long run.

[Arctic fox]

@Joe K RE "They know"

Yes, such choral recitals from a very obvious communal song sheet do have a tendency to arouse a certain degree of (understandable) cynicism. However, it may also reflect a certain degree of truth here inasmuch as they (the other OEMs) may not like the situation but that they may very well understand that Mountain View felt that it had no choice and that (to some extent) it *may* help Google to support its OEMs when the next cloud of sub-orbital writ delivery systems start taking off from Cupertino.

Although, I also have to say that it may very well be that events of the last year (Nokia-MS alliance and now this) portend a shake up and restructuring in the mobile communications and computing market that we might not quite have anticipated as recently as a year ago.

[JC_]

Elop & Nokia

Not such a bad move after all?

[Kristian Walsh]

You've just broken the first rule of mobile OS commentary...

You used the word "Elop" without the mandatory "trojan horse" reference.

;-)

I'd agree - having gone with Google would now leave Nokia in the same soup as Samsung or HTC.

Whatever way this is spun, it's bad news for the other Android vendors; now Motorola will have an inside track on upcoming Android development, and Moto will get what Nokia demanded (and were refused): the ability to influence the development of the OS. Android will no longer be a "one size fits all" OS (if it ever was); soon you'll need a Motorola device to get optimum performance.

Outside of the US, Motorola's sales are not worth the potential harm this acquisition will cause - pissing off Samsung in particular may backfire badly on Google. Samsung are still (barely) a Windows Phone licensee, and they're playing a long game with Bada.

[JC_]

Elop, Elop, Elop

Only 8 negative reviews to 4 positive - where've all the Android-fanboys gone? ;)

Seriously, how would it look for Nokia if they'd signed up to Android and then this had happened? No doubt the existing Android phone manufacturers are re-evaluating their options - there's not much point in helping your competitor.

[Arctic fox]

@JC RE "Elop & Nokia" Ssssh, you are not supposed to say such things here.

You are supposed to repeatedly howl the following:

1. Nokia has been BORGED.

2. Elop is Micro$oft's Bum Boy

3. Bye, Bye Nokia.

Didn't you get the memo?

Memo to El Reg, can't we please have a satire icon, hmmm?

[Blain Hamon]

Borged? What are you talking about?

Nokia's a finnish company, and has nothing to do with Victor Borge, who was from Denmark.

Dangit, now I'll have to reread the article with phonetic punctuation.

[Neil 7]

Where will they go?

Joining forces with the Linux Foundation and Intel to promote MeeGo devices could be an interesting "fuck you" from the hardware boys to both Google and Microsoft (not to mention Nokia).

It will be interesting to see if Google can maintain an independent software business in parallel with it's hardware business - this is where Nokia failed with Symbian. However, if Google can pull it off maybe Microsoft will finish the job and snap up what remains of Nokia.

[Neill Mitchell]

Well...

I guess beta level chip designs and firmware patches every 3 days will now become the norm ;)

Pity they didn't buy Nokia.

[Anonymous Coward]

Why pity

Nokia has its own corporate culture which is neither here nor there. It is one of the examples where consultants tried to improve the "business orientation" of the R&D and destroyed both the R&D and company in the process. It will take someone with the Czenghis Khan complex to fix that mess and Google clearly does not fit the bill.

Nokia is deeply entrenched in defending a number of delusional business models in telecoms like IMS. These models put the operator in the driving seat of any billing process and are fundamentally incompatible with the ideas behind app stores and putting the phone vendor in control of billing.

Nokia carries a big load of "legacy phone" baggage in having a significant part of its revenue coming from S40 platform and in developing countries.

All of that does not fit Google plans. Compared to that Motorola is a rather neutral option. It can be assimilated and does not carry a big chunk of legacy baggage. It already got rid of it.

[John Riddoch]

All about the patents?

With all the hassle Android has been getting about patent infringement, you have to wonder how much of that $12.5bn is for IP rights they can use to counteract Apple and Microsoft's lawyers.

Aside from that, it's an odd purchase; after the debacle of Nexus One, you'd have thought they wouldn't bother, but maybe the issue wasn't so much Google making a phone as the way they half-heartedly marketed it.

Time will tell; the smartphone & table market is still relatively new and there's time for a lot of changes to unfold.

[Anonymous Coward]

re

Debacle? You don't know much,do you. The phone did exactly what it was supposed to do and performed admirably. It was a proof of concept for Android and it convinced all other phone makers to endorse it as a platform.

[Manu T]

RE: All about the patents?

the debacle of Nexus One was started by Motorola. This is payback on Google's behalve!

Now the following scenarios could unfold.

Either Google kills off Motorola completely and indeed persuis it's initial goal to produce one reference phone which is to be commercially available every year. This phone is to be made by one of it's "partners" (the ones that dont complain that is)

Or Google will eventually downscale it's "partnerships" and become a full-time competitor to Apple with both hardware and OS in their own pocket (just like Apple and Nokia used to be).

This means that the only available "open" OS to off-the-shell ARM-based smartphones will be Windows Phone. The word "Open" here is, open for phone-manufacturors to purchase and put on their devices.

Unless some would be tempted to use Symbian and/or Meego. Perhaps Nokia was bit to quick to disband it's Symbian workforce.

[Chris 155]

Not too quick

Given how bad Symbian is and how much of that is the fault of the group developing it I'd say disbanding it happened too late not too quickly.

[Anonymous Coward]

"But where will they go?"

I heard Meego was going cheap...

or maybe Elop is right and only MS and WinPho7 can compete with the might of the Googlemeroid. That's compete for the scraps left by Apple, natch.

does anyone care about webOS and more to the point, does HP license it to OEMs?

[TeeCee]

@enigmatix

Aha, you obviously do reckon that Elop is right as you've gone on to reproduce what may well be the fundamental flaw in his WinPho strategy with your WebOS inquiry.

In the real world, "does anyone care about webOS" is *waaaaay* more to the point than whether or not you can get a license for it....

[MattWPBS]

a

"But once Google has a preferred hardware partner that it owns outright, it is hard to see why its former partners – now rivals – would wish to continue with Android.

Expect to hear a splashing sound as dozens of OEMs dump their green plastic robots overboard. But where will they go?"

Why would they ditch it? Unless Google starts pissing about and pre-releasing stuff only to Motorola, the change is that Google now has a LOT more skin in the game, and a lot more ammunition to defend Android. Like I said, predicated on Google not pissing about and favouring Motorola. Given their model's driven by advertising, rather than hardware, I can't see them trying to shut the ecosystem like that.

[Andrew Orlowski]

Re: a

Maybe it matters less than it once did, but you don't rely on a key supplier that directly competes with you. It's not a level playing field.

[Anonymous Coward]

Er ... "don't rely on a key supplier that directly competes with you"

Apple - Samsung ?

[Anonymous Coward]

@AC 13:38

See how that turned out.. Only proves Andrew's point.

[Rob Aley]

Re: a

This has parallels with Google & Mozilla. Google have their Chrome browser, with Mozilla Firefox being one of their main competitors. Google still pump tens of millions of dollars into Mozilla while Firefox tries to take market share from Android. Why? Because Google win either way, their market is advertising and they get a slice of the pie from either browser.

As long as you make more money than you would otherwise, jumping into bed with a competitor is often not the worst thing to do. Strengthening the market sector you're in may benefit others in that sector, but as long as it take share from other sectors (i.e. Apple) you're all quids in.

Companies like these will always have had a plan B at the back of their minds, even before this news, as Google could have messed up with Android in many different ways. It was never a proven platform. But at the moment, and perhaps for the foreseeable future, Android is still a better bet than the alternatives (Windows, Meego etc.). Google has the potential to drive a lot of advertising dollars its way through a diverse, happy Android ecosystem, probably a lot more than Motorola hardware sales could bring in. Google, and these other manufacturers, know this. Everybody wins (in the Android world, at least) if there is plurality in the Android harware market.

[Anonymous Coward]

The $12.5 billion fact

Do you think Google just dropped $12.5 billion on Motorola, a company which was bleeding money - may mean future cash injections - as some sort of defence of the platform and won't play favourites?

So Google will have to recoup that investment on advertising alone?

I'm sorry I don't believe that for one minute.

[scarshapedstar]

No

"So Google will have to recoup that investment on advertising alone?"

They intend to recoup it by not having to fend off patent trolls.

[NoneSuch]

YES!!!!

An excellent and timely acquisition! Not only does it give them a greatly expanded hardware backbone and expanded IP portfolio, but also gives them access to some of the most talented communications engineers on the planet.

Purchasing Nokia could be next as their step if the stock price keep plummeting. They have a market cap of 20 Billion right now which is a deal as long as they get rid of the old guard that gutted the company so badly.

[Neill Mitchell]

Share price up

Nokia's share price has gone up 9% since the announcement. The markets obviously expect them to be next. A good chunk of mobile telephony patents are held between Nokia and Motorola.

It's a sad day when the phone market descends into patent trolling. This is going to cost us all.

[Arctic fox]

@Neill Mitchell RE "Share price up "

I may be mistaken but I do not believe that MS presently believe that it is in their business interests to actually *buy* Nokia. Why should they when they can get Nokia's divided attention (given Nokia's situation in the market) *and* that the combination of Nokia and MS have little to fear from the "Patent Wars" that have recently been declared by The Man from Cupertino? Google was in a *very* different situation, a situation where they *badly* needed Moto's patent portfolio, *that* is what this is all about.

[StChom]

Pax mobilia ?

Question, in its new, "don't do evil" policy, will Motorola stop the patent hostilities it started last year ?

Or will G$$GLE pursue its Micro$oftisation down to this ?

[StChom]

Casus Belli

No we have an answer : yes, Google (Motorola) anticompetitive actions will continue. Still suing apple for patents.

The size of that hypocrisy... it must be open, or free, or something.

[Anonymous Coward]

Googlrola

It'll be interesting to see how long a Googlrola phone takes to make it to market and at what price points.

[Ru]

Motoroogle

Rolls of the tongue a little more smoothly.

[Nathan 6]

Relevance to Oracle Lawsuit?

This may help Google with their Oracle lawsuit. Since Motorola is a J2ME licensee, then as a result of this purchase, Google becomes one also. The still would have to pay damages and such, but at least they would now have a license to ship Java in mobile devices.

[A Non e-mouse]

Java ME Vs Std Edition ?

I thought one of the big problems with Java (for Google) was that Sunacle would only allow Java ME on mobiles, whereas Google wanted the full-fat PC oriented Java Standard Edition ?

[Nathan 6]

J2ME licensees can ship what ever other API they want

Once you have a J2ME license, you are free to ship what ever other APIs you want on top of that. You only have to implement the APIs need for J2ME to satisfy the license agreement. For example, RIM ships a standard J2ME VM, but they add a lot of their own APIs on top of that. If you look at Andriod, is essentially the same approach in that they do not really have a full fledged Java 2 platform since no Swing etc., but if they simple implemented the J2ME API then they would be in compliance with the J2ME license.

My prediction is that Oracle Google reached an agreement in which the Andriod APIs becomes core the next mobile Java platform. Both sides would be foolish not to do this.

[TeeCee]

Relevance to Oracle Lawsuit?

Er, that would be none as the whole thing's about the fact that Android eschews implementing J2ME in favour of an allegedly illegal[1] implementation of full-fat Java.

[1] If you're Oracle.

[Anonymous Coward]

Motorola's rebel attitude

Wasn't Motorola the biggest Android rebel, always poking at Google by going with Bing as the default search engine for some of their Android phones and entering into a deal with Skyhook location instead of Google's own service?

Should be interesting to see how the two work out. Google may find that Motorola can be quite the beast to tame.

[Anonymous Coward]

I think you'll find

that the choice of search engine in the Motorola Droids was down to the carrier, Verizon, who had their head turned by none other than Microsoft offering bags of cash (surprise, surprise).

As it happens, Verizon were pretty much the only reason Motorola remained afloat.

[Anonymous Coward]

@AC 14:23

That may be so, but what about the Skyhook contract?

Or Motorola Mobility's own CEO Sanjay Jha blaming crappy Android apps for poor phone performance:

"some 70 percent of returned Android devices are brought back for this very reason — apps are decimating performance, and in turn, the user experience." [1]

Doesn't sound like an easy to tame crowd.

[1] http://thisismynext.com/2011/06/02/motorola-ceo-blames-crappy-apps-poor-phone-performance-blur-save-day/

[flingback]

I guess there's always the chance...

...that by buying the Motorola IP portfolio Google may be able to support it's Android partners and prevent such shenanigans as Apple blocking Samsung from selling the 10.1" tab in Europe. Motorola have been around a long time and have excellence in radio design so maybe there is a quid pro-quo coming somewhere along the line.

[RichyS]

How?

How would this in any way stop Apple blocking the Tab's sale? That order was on the basis that the Tab looks an awful lot like an iPad, and nothing to do with any patents/copywrite that Android may or may not infringe.

[AdamWill]

nope

nope. it was on the basis that the Tab looks an awful lot like a generic picture of a tablet (not an ipad) that Apple filed in 2004. read the legal docs, don't listen to the PR bods.

[Wibbly Wobbly]

That didn't last long!

My how things change - in just 5 days...

http://www.reghardware.com/2011/08/10/motorola_hints_at_microsoft_deal/

[OhFFS]

Odd conclusion

"But once Google has a preferred hardware partner that it owns outright, it is hard to see why its former partners – now rivals – would wish to continue with Android."

Wow, 10/10 for conjecture.

Every now and again, different manufacturers are selected to produce the flagship model (HTC, Samsung, LG). This doesn't result in all the others throwing a hissy fit.

Neglecting manufacturers other than their own subsidiary would dismantle the Android community. Any particular business reason for that?

Compared to ads, Android isn't a huge moneyspinner for Google. It's about establishing a platform for their services and advertising that they can't be locked out of, like Chrome.

Most other commentators have reasonably figured that the 24,500 patents might have something to do with it.

[Arctic fox]

@OhFFS RE "Odd conclusion"

I agree with you. Whilst one cannot discount the possibility of poor judgement completely I have to say that I doubt whether Google seriously intends to shaft the rest of their industrial partners. Any more in fact than it is likely that MS will because of *their* alliance with Nokia. In both cases such behaviour would be unbelievably stupid. I have no doubt that their other OEMs (whether they are Android or WP7 OEMs or both) are a bit nervous but I suspect that both Google and MS will regard it as in their own best interests to reassure their various partners. This has (IMO) far more to do with drawing the battle lines with regard to the coming Patent Wars (Armageddon II coming to a cinema near you). What will be left on the battlefield in the aftermath is not something that is easy to predict.

[Anonymous Coward]

About all that lovely IP

are we absolutely sure that it's been bundled with Mobility and isn't staying in the pockets of Solutions?

[Anonymous Coward]

Re:

What? You mean that all these people above are commenting on a piece of news without having any factual information?

Surely not...

[AdamWill]

Well

we have circumstantial evidence. i.e., you'd have to be utterly insane to spend $12.5bn on the non-union Mexican equivalent of HTC. If Google's buying MMI for its handset business, someone at Google is for the hop in short order...

[Anonymous Coward]

How long before Motorola don't make handsets?

excellent comment from Bryce Elder of @ftalphaville

"I'd be more interested in Motorola Mobility's patent portfolio. It has 24,500 patents, including 15,200 for handsets and another 6,200 for cornerstone technologies such as 3G, 802.11 (ie. wifi) and MPEG-4 (ie. video). The handset patent wars have been heating up a lot recently, with Apple being generally disruptive to Android-centric manufacturers HTC and Samsung. Might Google be building its own arsenal for counter-suits? "

Combined with the statements from the hardware partners it seems pretty clear what the play is here.

[Andrew Orlowski]

Re: How long before Motorola don't make handsets?

Obviously.

[Anonymous Coward]

Re: How long before Motorola don't make handsets?

The only doubt about a move like this was when and which player Google would buy. Both Nokia and Motorola have been weakened over the years and both have been credible acquisition targets: had Google waved enough cash in front of the Nokia investors, quite a few would probably have taken it and walked away from that nightmare, especially given the spectacular loss of value since Elop's reign began.

Doing this acquisition turns the tables on the likes of Microsoft and Apple and their little shakedown schemes whilst indicating to the likes of Intellectual Vultures that Google can now play Patent Snap with whichever shell companies are doing the bidding of IV in East Texas on any given day. Still, it'd be nice to see Google move to rid the world of software patents outright, drawing a line under the aggressive Motorola tones of late.

It certainly can't hurt to get some hardware and manufacturing expertise. I imagine the big G has a bunch of side-projects that might derive some benefits from that.

[AdamWill]

20/20 hindsight, there

"The only doubt about a move like this was when and which player Google would buy."

You know, that would be a lot more impressive if you weren't "Anonymous Coward" and could point to the post where you said there was no doubt Google would spend $12bn on a failing handset manufacturer *before* it happened.

[Anonymous Coward]

Re: 20/20 hindsight, there

"You know, that would be a lot more impressive if you weren't "Anonymous Coward" and could point to the post where you said there was no doubt Google would spend $12bn on a failing handset manufacturer *before* it happened."

I don't have to point to anything, and I'm not out to impress anyone. If anything, I would have expected commentators who supposedly know the industry to have done so already; that they did not just illustrates how little they know. My only regret is that I didn't speculate financially on the matter, but then I'm not inclined to do so, anyway.

In any case, should you think I've just made this up - I don't know why anyone would do that and remain anonymous since it's hardly boosting my reputation in any way - the reasoning that led to this observation crystallised when the Nortel patents were acquired by the "Apple and pals" cartel. Nokia are obviously best friends with Microsoft and offer them the patent umbrella, leaving Microsoft to go and sue whoever it pleases.

Meanwhile, that cartel decides that the Nortel patents are a great way in to not only "defending themselves", but just as likely "asserting their intellectual property", and if they split the cost then they supposedly get a bargain. That Google made supposedly "stupid" bids merely shows that the aim was to make that bargain a bit more expensive, and I think the cartel should be investigated for anticompetitive practices if only to make it a hell of a lot more expensive still for all concerned.

So how do you turn it around if you're Google? Wait for another bankruptcy auction? The elephant in the room is clearly any wireless vendor with a low valuation and a seat at all the right (standards cartel) tables. If you want patents, that's where you'll find them. (As I also wrote, there may well be non-patent assets that are also interesting to Google, too.)

As I said, I'm not trying to make a career as an analyst, nor am I looking to gain any "reputation points" for saying I called this - who would get them anyway? Anonymous?! - so you'll just have to take my word for it. Or not - I don't care. But you might want to wonder why no-one else called it. Maybe they made a few quid on the quiet, but I rather doubt it. Instead they're writing articles pooh-poohing the acquisition as if it wasn't worthy of being on their radar.

[Anonymous Coward]

RE: Re: 20/20 hindsight, there

Luckily, I did speculate financially on this (albeit somewhat unintentionally) and caught the mid-trading-day peak.

Ultimately this has (IMHO) the potential to work out well for the Android set since Google will now have some patents to actually wave around to threaten off the worst of the trolls and make the other mobile players think twice about spurious attempts to block Android's development with patent suits. Of course all of that is predicated on Google doing right by their manufacturing partners instead of using MMI like their own version of Western Electric under the pre-divestiture AT&T.

Also it might mean that Moto might actually turn out a halfway decent handset (ie lacking any semblance of BLUR, resuming using decent displays and proper body materials like the OG Droid)

[Ian Ferguson]

This can only be a good thing...

...for Microsoft.

[g e]

Another veil lifted

There was a Reg article last week which I poo-poo'd somewhat in which the write suggested Google grow up and get a clue. My retort was to suggest that perhaps the writer didn't in fact know Google's entire gameplan so couldn't possibly have valid comment, especially as they were comedy-bidding on Nortel.

Obviously Google have given a lot of thought as to which path to take and successfully bumped up the Nortel price to its competitors while getting a deal in place with IBM IP and now the acquisition of Moto Mobile who are surely one of THE oldest players in mobile and must have a serious IP portfolio.

I submit that Google in fact have been very grown-up all along and have a clear strategy with which to move forward as I suspected (and I'm sure many others did too).

So. There you go.

Poo Poo on you ;o)

[Tom 38]

I think they had enough of Motorola

From what I've read, Motorola produce the worst Android handsets money can buy. Perhaps Google just got ashamed of this being 'the Android experience' and said 'either sell us your phone business, or you are out of the Android game'.

[nichomach]

Perhaps the Droid

...may have been a bit rough, but we have a few Defys in service and they're very popular, so they haven't been doing everything wrong.

[Dr. Mouse]

Agree

I have only one problem with the Defy, that's the locked bootloader. However this gripe is from my geek side, for a consumer this would not matter.

Aside from that the Defy is well built and a solid all-round performer, with a great screen and enough oompf for most tasks. Add in the waterproof* element, and it's a fantastic phone.

* I have not tested the waterproofness of my phone, as I bought it "refurbished". It may not be after that, so I won't be dropping it in the bath on purpose, but I have handled it with wet hands and it has had a pint spilled over it with no consequences (for the phone... I had to buy another pint).

[Tom 38]

Oh really?

I thought that Moto had a real bad reputation for releasing devices with firmware that just got abandoned at release version and that it was impossible/extremely hard to run with up to date, bug free firmware. Is it the original Motorola Xoom that still runs with Android 1.6?

Certainly that was the advice that I got when I asked an Android aficionado what to buy: Don't buy Moto, firmware never gets upgraded, don't buy HTC, the loaders are all locked*, Samsung are OK.

* not any more, ISTR

[Anonymous Coward]

Oh to be a fly on the wall...

I bet Jobs is having the coffee dry cleaned out of his table cloth this morning :D

[Armando 123]

Not necessarily

In strategic terms, it might be that Google blinked and now they're trying to play Apple's game of providing you the whole widget: hardware, software, etc. Remember, Apple sells solutions; everything they sell is part of a solution: the iPhone is part of the mobile music solution, as is iOS and the iTunes store.

The amazing thing to me is not that a lot of people like us don't get this; it's that a lot of industry leaders don't get this, either.

[Mage]

Apple And HTC take note

But for Different reasons.

Google now has REAL phone IP instead of the toy phone patents of Apple.

But it puts HTC etc in a Quandary...

Apple + iOS

Microsoft + Winpho + Nokia (but who wants to come on board with an OS in a nose dive )

Google + Android + Motorola.

Also Android isn't "really" open source. Honeycomb is only the start. If it's more advantageous to Google to put all the eggs in Motorola and Closed source they will.

Google has no real commitment to Penguins. Only committed to Google.

[M Gale]

Interesting timing.

It's been less than a week since a Motorola exec was alleged to be floating the idea of suing other Android manufacturers, wasn't it?

Oh well. Apple, Microsoft (and Motorola), you brought this upon yourselves. You could have competed with innovation, but instead you decided to go for litigation. Big surprise that Google have now gone and bought an absolute arseload of patents to slap you back with? Not really.

[Pete 2]

A new "Oracle buys Sun"?

Software company buys hardware manufacturer - and we all saw how well that went for Sun.

By Bye Moto

[Zaphod_42]

Market it as the gPhone ?

Or would Mr. Jobs take exception to that...?

[Oli 1]

o rly?

does this mean motorola will finally update a phone or two?

nah, thought not.

[Jim Benn]

What IP DID Google get ?

When Motorola split into "Mobility" and "Solutions", did they SPLIT the patents, or SHARE them equally? After all, both sides of the "call" depend on these patents. If they SHARED them, then Google has a wealth of IP that they now can use "for free". They also have a whole new can of worms, for I'm sure there were huge, detailed agreements on what each "half" of Motorola could and could NOT do with that IP.

Maybe my experience is limited, or I could just be plain WRONG. BUT, I have never had a problem with the PHONE part of any Motorola device. Clarity, call completion, sensitivity, etc., have always been outstanding on any Motorola "cell phone" I have owned. I have NOT, however, owned a true "smart phone" from Motorola. So I could easily be wrong. My opinion, though, is that if left on its own, Motorola (Mobility) can (CAN, not DOES) build an exceptional cell phone.

==

[JetSetJim]

@Jim Benn - What IP did Google get?

Google got the entire Motorola patent chest. When Mot split into MMI and MSI, **all** the patents owned by Motorola Inc. remained with the Motorola Mobility company and all Solutions got was a license to use those it named in a big list. There was no splitting or sharing. Also, the handset portion of the patent list was quite a lot bigger than the network infrastructure portion - both in size and in revenue generation.

I know cos my name is on a few of those patents, plus, now, in theory Google could even file some of my ideas in the future that hadn't yet been filed as even those are owned by Motorola Mobility. Such is life...

[gherone]

There is more IP in there then listed so far....

Both Mobility and Solutions parts have full rights to the IP of old Motorola. What google is getting is a much larger stash of IP then listed so far in the article or comments. I can say that Motorola did not defend its IP properly, and in most cases the higher ups had no idea how many patents were trampled up by competition. Also, keep in mind that Motorola has/had a huge chest of cross-licensed patents. Let's look at some of what is in there (incomplete list, but is a start):

1/ Process technology - Six Sigma, Lean, Process Average Testing - they all have patents and were invented in Motorola. Pretty much all companies out there making high volume electronics are probably infringing one or more Motorola process or manufacturing / testing patents, regardless of the product. Motorola did not want to sue people for using 6 sigma - Google may view things differently, at least where Apple is concerned.

2/ Silicon IP - Freescale and OnSemi may have been independent for a while, but Moto owns the old IP. Not sure if all of SUN's silicon is so far away from Moto's basic patents on memory interface to a CPU, cache coherency, dynamic clock speed changes, etc. to avoid counter-litigation for past infringement. This may help Google in its ongoing dispute with Oracle. Also, there are smaller guys out there who would LOVE to license the rights to make 'HC05, 68K, 'HC08, or 'HC11 / HC12 compatible chips - they are still used in high volume out there and will be for many years to come.

3/ Software - has anybody seen Moto's Java license? Until somebody can say for sure, it is a huge wildcard - it may get Google off the hook with Android as far as Java is concerned, at least for the future. Not to mention a lot of other software (Motorola made and sold its own Unix variant ages ago) which may come it handy...

4/ Basic RF and cell phone patents - Nokia and Moto may have had a cross license, but I would be amazed if Nokia had any rights to sub-license Moto's IP to Apple as part of their settlement. In other words, this alone may get Google home free and force Apple to cross-license.

5/ Satellite technology - Iridium worked, and the same basic technology / IP can be licensed to third parties, if Google is not interested in its own satellite fleet :)

6/ Automotive technology - Moto sold to Continental its automotive division in 2006, but it has IP license rights to all products made up to that point - from MEMS and packaging know-how, to sensors and automotive modules (trans, body, engine, powertrain, telematics). Some guys would be quite interested in that portfolio...

[Confused Vorlon]

They don't care about the hardware

Google isn't a hardware company. They probably don't have what it takes to become one, and they probably know it.

They bought Motorolla for the legal shield it gives through patents.

Likely next steps (after the acquisition finishes)

1) sell the hardware company - but keep hold of the patents

2) keep the hardware company at arms-length and demonstrate that they're getting no special favours

Palm had this problem when they owned the OS (which they were trying to license), and also manufactured their own hardware.

However when Sony (major licensee) wanted to do something different, they had to go to palm, get permission and get palm to build it into the OS.

The story is rather different here; Android partners can make their own changes to the code without worrying that their innovations will be leaked to Motorolla before release.

[Anonymous Coward]

Re: They don't care about the hardware

"Google isn't a hardware company. They probably don't have what it takes to become one, and they probably know it."

I thought Google were actively interested in hardware engineering: they have a lot of it, as you know, and are heavily constrained by issues of power, heat, performance, cost and systems management. That alone probably makes them as much a hardware company as Apple, since contrary to popular belief, Apple doesn't exactly make all their hardware themselves. Sure, Apple acquired some semiconductor design expertise (a lot of it subsequently left), and brands CPUs with the holy name, but it's the likes of Samsung that do the heavy lifting.

One could have pointed at Oracle's acquisition of Sun and said the same, just as commentators did at the time, pooh-poohing Sun's kit, but everyone with any knowledge of the Sun hardware business knew that before long Larry would have found some gems and decided that he liked that part of the business, too. And so he did.

[jai]

why motorolla?

when was the last, decent, well-made, good-looking motorolla phone? i can't think of one

this purchase was purely for the big bag of patents

wouldn't be surprised to find google wind down and throw away the actual phone-making part of the company they've purchased and just keep the patents to protect android.

[Zog The Undeniable]

Well, I have a V3

which has been in constant use for the last 6 years or so. It works well *as a phone*, it's very slimline and the battery still lasts a week. OK, it has a VGA camera and really bad WAP, but I only wanted a phone.

Motorola seem to produce a random mix of winners and duffers in phones.

[Sander van der Wal]

Where to go to? Windows Mobile

There's nothing else, unless...

Symbian!

[Hi Wreck]

Nokia will be next

Google needed the patents. The lawyers must be salivating even as I type.

[Anonymous Coward]

From Larry Page on the Google Blog

http://googleblog.blogspot.com/

'We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to “protect competition and innovation in the open source software community” and it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.'

Which is a bit of a reversal from Google's public statements a couple of weeks ago that they didn't like the blatant patent grab going on right now.

[Matt Bucknall]

It's all about...

..the IP. I really don't think Google will be using the acquisition to make hardware.

[Anonymous Coward]

IBM IP Transfer Dates

I think I saw on Florian Mueller's blog that the stuff from IBM was signed before the Nortel auction was complete.

[Anonymous Coward]

Yes but who believes anything that guys says?

I mean come on :-|

[Anonymous Coward]

If this is all about patents

Google is surely spending a lot of $$$ on them now, $12.5 billion here, $1 billion on the IBM stuff...

Will be interesting to see if this is really a wise investment, or if it wasn't what the other players were pushing Google to do all along...

[Anonymous Coward]

Googorola?

Google will want to shift Motorola (Googorola) handsets now - Samsung, HTC etc. can basically get stuffed. Let's see if Motorola are first to market with latest Android updates and enhancements.

Time to buy an iPhone.

[Anonymous Coward]

Nokia next...

Don't be surprised if Microsoft buy Nokia - or perhaps Apple - they might do it for the manufacturing facilities and of course those patents.

[TonyHoyle]

Well..

Microsoft buying nokia - surprised they haven't already (perhaps they're waiting till it's cheap enough). Buying apple - aint going to happen. First his jobsness would rather gouge his own eyes out with a spoon than sell his company, and second MS need them to point at and say 'see.. we're not a monopoly there's another company competing with us!'

[Goat Jam]

Errm

Not to mention that APPL is worth more than MSFT these days*.

* Market cap

[Torben Mogensen]

Hardware

While it is relatively clear that Google bought Motorola mainly for their patents, this doesn't mean that they have no use for the hardware production facilities or that they will out-compete their Android partners.

Google could, for example, use Motorola's hardware division to build Chrome computers. Or to make phones with experimental designs that might or might make economic sense on their own, but which might broaden the market share of Android. Or to provide hardware design and manufacturing facilities to third parties that want to produce Android phones but do not have the necessary facilities themselves. How about a Calvin Klein phone or a Gucci tablet?

[Anonymous Coward]

You want to upgrade your face

It's not relevant but nevermind..

"Dan's a fantastic man! He really is. I was talking to him earlier and he asked me what kind of phone I had and I said a Motorola Timeport. And he said, 'That's saaaaaad, you wanna upgrade'. I said, so do you - to a new face. He nearly soiled himself! He said he was laughing so hard he had Kenco coming out of his nostrils, and that made me laugh. But...my nostrils were clear."

[Tom 38]

Who down-voted this magnificent Alan Partridge quote?

This country!

[mark l 2]

Fork Android

If one or more of the other manufacturers wanted to they could fork the open sourced Android code (afaik thats upto 2.3 atm) and create their own Android version independent of what Google was doing with Motorola.

Of course it wont be an official release so wont have access to the Android market but with the likes of Amazon getting into this area i don't see it being a huge problem

[Anonymous Coward]

Why?

It won't be an easy job forking Android, they'd get all the problems (lawsuits) without any great advantages. Then they would have to pay for development as well. For Samsung it would make much more sense to go with Bada, which they already own.

With this patent lot Google even has the Android manufacturers tighter by the balls. Threaten to leave the Android Club? Think again.

[Snarky]

Brilliant

Right. Giving licensees added patent portfolio really hurts. Oh, wait, that only hurts Microsoft's attempt to extort from them.

[scarshapedstar]

The FUD has turned

Yesterday: Google is doomed because Apple and MS will patent troll Android to death.

Today: Google is doomed because all of the other OEMs are going to abruptly abandon a popular smartphone OS and demand that their customers switch to WinPho7 or something.

Tomorrow: Google is doomed because its legal team is getting bored.

[Simon Rockman]

A patent war could be a very bad thing

When I worked for Motorola - and ran the 'ideas' process - we worked on the understanding that we knew various other companies trod on our patents and we on others.

But we were wise enough not to pursue it because we could see that it would be injunctions all round and no-one would sell any phones. There was a tacit understanding that the only people it would be good for were lawyers.

The new-boys Apple/Google/RIM don't get it. Apple's injunction on the Galaxy tab II is madness. If Google strikes back it will end up with the whole industry gridlocked.

Simon

[Jonathon Green]

We don'need no steenkin' title...

I've occasionally wondered what it would take for Motorola to adopt a sane (or at least something like stable) handset platform strategy after being an early Symbian partner, pi$$ing about a zillion dollars up the wall not developing its own linux based platform, dabbling in BREW, dallying with Microsoft, briefly appearing to regain enthusiasm for Symbian, and latterly veering wildly into Android territory.

Well I guess we've got an answer to *that* question now...

--

JG

[Rosco]

The whole purpose of Android

People seem to forget the purpose of Android. Back when Android was first released, the consensus seemed to be that Google were dissatisfied with the low rate of mobile internet adoption. They weren't getting enough ad sales on mobile and attributed it (rightly enough) to the crap browsing UI on most handsets. So they decided to speed it up by making it cheaper to make a phone that people would use to browse. Android was a loss leader for them.

Android are not in competition with other handset manufacturers. They don't care if punters browse the net with an iPhone, an HTC Desire or a webOS phone - as long as they do it via Google search. (Arguably WP7 changes that a bit with Bing baked in but right now it's not exactly competition).

But I think they do care that their Android partners are protected from litigation because they're producing the low end handsets that are allowing the masses to browse nicely.

[Andy 115]

Good job there is no N in Motorola or Google...

MOtorola gooGLE AndrOID

[James Hughes 1]

Android Lives On..

Many seemed to be saying that apart from Motorola, Android handset manufacturers will get a bad deal. Why? As someone above said, Google make money through advertising, so the more Android handsets there are the more they make.

It's simply good business to keep Android going on as many platforms as possible. Which means giving all manufacturers the best Android.

As to the patent chest - Google don't like IP and patents but have been forced in to this. Don't blame them for the patent litigation war started by Apple (and others)

[Yet Another Anonymous coward]

@What IP did Google get

It doesn't matter. Since you only find out the worth of a particular patent in court - at the end of a $10M battle the actual patents and wording are pretty irrelevant.

Just having 27gazzilion patents from one of the inventors of cell phones to threaten people with is enough.

[Charlie Clark]

It can't be the hardware

That's largely all made in China by cheap workers or robots. Becoming a hardware company would be a huge change for Google which is interested in a volume that it probably couldn't provide as a single supplier. The acquisition reminds me on the OnVideo purchase last year which led to WebM. I really can't see any manufacturer want to take on Google with its new patent war chest. Motorola was involved in mobile phones from the beginning and have patents on the whole value chain. It's easy to get hyperbolic on this but Google could probably injunction the hell out of Cupertino.

Financially it is equivalent to the Nortel and Skype deals. Microsoft is also giving Nokia money for the switch. Based purely on like for like I would say that Google got by far the better deal. MS may have to buy Nokia after this.

[jotheberlock]

Is it possible Google might simply stop making Motorola phones?

Or at least only produce unlocked developer ones aka Nexus One? They could simply fire most of Motorola's hardware guys, not be in competition with their ecosystem, not lose money selling phones, and still reap the benefits of the patents.

[Anonymous Coward]

Use the ARM business model.

Keep the IP and the designers sell off the manfacturing parts and just sell hardware designs to Android licencees, like ARM does with processors.

A one stop shop Hardware design, OS, Services and App store, just add integration. (That will of course eventually strip most of the value add from making Android phones. Leaving Samsung, HTC etc right at the bottom of the food chain.)

[Anonymous Coward]

Regulators

Snuff one of the few last major US mobile makers?

I'm sure that plan will go down well with regulators. Also think where those hardware guys would go work for...

[Anonymous Coward]

If it was that simple to just get rid of those guys

Moto would have done it a few years back, surely?

[Greg J Preece]

MEEGO!

Come on, do it! That one really is open source, and it doesn't spy on you either.

[ratfox]

I don't see HTC etc leaving

Surely, it must be clear to everybody that Google is more interested to have everybody use Android than by making money selling phones. It would be plain daft of them to give advantages to Motorola... Considering that any money they make in that quarter will be a small fraction of what they make with ads.

[Uncle Siggy]

Corporate Leprosy

As a former Moto mobile division castaway -- Google has just been infected by old-school management rot.

[Mikel]

Google has no interest in physical products.

They will take the patents, license them back to MMI and spin the freestanding company back out so fast nobody will have time to change their voicemail greeting.

[Anonymous Coward]

quicker smartphone adoption = more ad revenue from mobile

As lots of people have said, ramping mobile ad revenue is the google game plan. What better way to speed up adoption than to have your own smartphone maker who can churn out low-end smart phones (for developing economies - i.e. those with the cash at the moment). The "partners" won't like it (all that much) because google is now competing with them but , hey, they get to hide behind uncle g's patent war chest.

So maybe it is about the hardware as well as the patents.

[Noth]

What about the Atrix line and accessories?

I'm most worried about the Atrix Lapdock with this buyout. How to know they'll keep up this fantastic concept?

[Mr Floppy]

How about a dock the phone as the track pad

or a second screen or something. Motorola missed the design there.

[Lofcom]

G had enough

Looks like Google had enough of developping Android only to see it look completly different when it gets to the end user. Or, they may have followed Apple way of doing integration, rather than fragmentation - lets do the software and hardware and get a single phone that makes us money. No more free Android for "partners" to be competitors in a few years.

Not suprised, Google tried to screw mobile operators before by selling Nexus direct and unlocked. Didn't work. This is yet another go.

[Anonymous Coward]

screw all this shit

from now onwards, my milestone will get the latest version of android

harr harr harr

[Dick Emery]

Bad Apples

They are all as bad as each other. But at least Motorola now have Goliath in their court to fight off the blatent patent trolling of Apple. 17,000 patents vs Apples measly 3000 or so. I'll just be happy if Jobs gets told good and proper like.

[Anonymous Coward]

Story not completely clear yet.

Maybe they will turn around and spin off their Motorola division in an IPO, with the provision of retaining their patents but indemnifying the new company. Even at an overall loss, they will have gained their patents cheaply and maintained their non-competitve relationship with their various hardware manufacturers.

[Metz]

It won't be cheap at all....

The premium Google paid for Moto will never be realised in the market if they spin-off and sell. Although I guess they'll still do it anyway, but that 63 cent premium will be the cost.... I recon they'll be happy if they sell for $10b... so the patent-bag will have cost them $2.5b. Wether it's worth it or not will remain to be seen.

[Anonymous Coward]

Is this really about phones?

I am wondering if this is really about tablet and newly emerging technology more so than phones, however unlikely it may be...just imagine the PR storm if Apple sued Google for creating a tablet device like the ... xoom. This seems to me like a blanket of protection around the core of android for both phones, tablets and future devices alike. Apple cannot keep fighting on all fronts, especially if a google branded tablet enters the ring. There will be such a huge shit storm of ip infringement claims, you can pretty much see Apple getting a taste of their own medicine. No more iPhones as it infringes on Googarolas IP....where is my popcorn..

[Metz]

Patent bag...

...For one thing, I'm pretty sure that Motorola aquired a whole bag load of un-patented Psion technology, that they sunsequently patented themselves. Psion are one of the grand-daddies of PDA.. and a whole lotta patentable tech that came out of those doors.

[Metz]

Who do you blame....

you have to blame the morons at the patent office who granted the patents in the first place. What were they thinking....

[Anonymous Coward]

Potentially no conflicts here.

Simple solution: Motorola are bleeding money with no way to stop it. Kill phone production, stop the bleeding. Keep the patents which now become your defense arsenal. Keeps the other vendors happy, you aren't stuck in the commodity business, everybody is happy. Well, except for a few thousand Motorola employees who were going to lose their jobs eventually anyway because they were trapped in a bad business model.

[rav]

Android is safe.

Android is a great brand. As is Apple. People buy brands. Only a marketing idiot would drop Android and then what? Windows? Meego? I don't see how google can do it better than Motorola or Nokia for that matter.

[Anonymous Coward]

really.....

This is the google demonstration of "put your money where your mouth is"

they need the IP, and they pay for it. they get a troubled but very experienced mobile hardware maker in the deal.

No single company betting on Android could count on being alone and without competition. It's in android's DNA that anyone can give it a try. Hence the unnatural alliance of MS and Apple in the first place.......

I cannot see why any company having invested heavily in Android, would object in making the reach of Android bigger and better protected against the USA's ludicrous and innovation-stifling patent "system".

AC