First, you'll want the nitty gritty. Google is set to acquire Motorola Mobility for $12.6 billion, which means Google is paying "a premium of 63 percent," based on Motorola Mobility's closing stock price on August 12, 2011. Google's plans to enhance the Android user experience by making Android software and Motorola Mobility hardware integration silky smooth.
Seeking PatentsGoogle promises that Android will remain open for other hardware manufacturers to fully leverage. Google also says Motorola Mobility will be run as a separate business, but I think we all really know the real reason that Google wanted Motorola. Patents. Motorola Mobility is in possession of an extensive patent portfolio that was the envy of many. According to Google CEO Larry Page, on his official blog, patent disputes were one of the reasons for the acquisition. Page has said that...
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.
Software-Hardware IntegrationOkay, but there's more, isn't there? Yup. Remember how Android Honeycomb was locked down so Google could control the tablet user experience? It seems to me Google liked that level of control so much they wanted a little more of it. It's very possible Google has been disappointed with what OEMs have done with Android devices, either feeling they're underpowered or simply slapped together with little concern about melding the OS with the hardware. Bad Android phones gives Android a bad rap, no matter how many good Android phones arrive.
With Google controlling the hardware side of things, Android could blossom into something very beautiful, something that could directly attack Apple in terms of quality of software, hardware integration and user experience. I know this statement is a bit subjective, but some critics often say Android hardware just isn't sexy. With Motorola patents under its arm, Google will be at liberty to deploy a plethora of cool hardware tweaks and modifications, essentially building the ultimate Android phone. Vertical integration, just like Apple.
Bad News for Android Partners?If you're the careful observer, you might say, "Hey, Google is undercutting the other Android handset manufacturers, aren't they?" Although Google has sworn up and down that they are committed to working with all existing partners, in a way, they are undercutting partners.
You could imagine in the future that these partners will be pitting their own hardware against Google's own "pure" Android phone, which will likely be billed as the best Android phone ever (and maybe less 'disposable.') Isn't that anti-competitive? How can other OEMs compete with that? I'm guessing it will be on price and unique feature sets, and perhaps even on basic hardware specifications. Like Apple has shown, however, hardware specifications aren't everything when the hardware and software are optimized together.
On a Positive Note...To be fair, despite how rough this news may be for a company like HTC or Samsung, Android will likely gain a much better reputation from whatever Motorola-Google lovechild springs forth. Tangentially, other manufactures could see a spike in their own sales, too. If Google proves that Android can match iOS in terms of reliability and quality, that could really put Android on top not just in terms of mobile phones, but as a mobile operating system that could be deployed more consistently and in more mission-critical devices.
Competition is the life blood of innovation, so I'm excited to see where this is all headed, but Google should be careful, especially with anti-trust probes arriving from the FTC. Meanwhile, Google says the complete acquisition will close sometime at the end of 2011, if not early 2012.
We'll be watching.