Google agrees to buy Motorola's mobile unit for $12.5 billion

By on August 15, 2011, 9:17 AM

Earlier this year Motorola finalized the process of splitting into two separate companies: Motorola Mobility Holdings and Motorola Solutions. The first handles the company's mobile and consumer business while the latter develops communications products for enterprise and government.

The move was aimed at refocusing each unit on their core businesses. In a rather surprising move, however, Motorola has now agreed to sell off its cell phone division to Google.

Pending the customary regulatory approvals, this would mark Google's largest-ever acquisition yet and makes the company a serious contender in the hardware business. According to reports, the transaction price comes in at around $12.5 billion, which at $40 per share represents a 63% price premium over Motorola Mobility's closing price on Friday. The deal has already been unanimously approved by both companies' boards.

Google has a thin portfolio of wireless and telecommunications patents, which has resulted in a significant amount of patent litigation for the company and its Android partners. By acquiring Motorola Mobility, Google gets ownership of a huge collection of patents that it will be able to use to defend itself as well as the Android platform.

It's worth noting that the move also puts Google into direct competition with licensees of its Android operating system. However, the Internet giant has pledged to continue offering Android as an open platform and companies such as Samsung or HTC, which have partnered closely with Google in the past, will be able to license Android as before.

Google and Motorola expect to complete the transaction by early 2012 if no legal roadblocks get in their way.




User Comments: 11

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Guest said:

yay maybe google can spit out a droid that doesnt feel like a damn rock

Archean Archean, TechSpot Paladin, said:

Pretty bold move on the part of Google, but a logical one considering the legal troubles android is facing. But I think it can also push the likes of Samsung and HTC away, as they will be directly competing against Google now, so they probably will diversify their offerings across multiple platforms.

mario mario, Ex-TS Developer, said:

The next couple of years in mobile will get very interesting, I'm sure Samsung will try to move from Android to its bada OS, Microsoft will try aggressively to license WP7 to other vendors or try and buy Nokia or RIM right away, HP might me able to finally license webOS to other partners.

Who really knows, but surely this deal will spawn some interesting moves in the mobile world, let's just hope the consumers will benefit from the aggressive competition.

Archean Archean, TechSpot Paladin, said:

I think MS will be more inclined to buy Nokia. Nokia is far bigger and more recognized brand all over the world when compared to Motorola. It seems a logical step to me, but mind it is just a speculation.

mosu said:

Now Google may consider a strong financial support or even the possibility of buying OMAP division from TI.On the other hand, no support for Bada in Europe will keep Samsung close to Google

Archean Archean, TechSpot Paladin, said:

On the contrary I think likes of Samsung will start to diversify by offering other platforms as well. A smart business would never want to put all their eggs in one basket.

LookinAround LookinAround, TechSpot Chancellor, said:

MS has a strategic advantage in buying Nokia over any other company: Nokia owns NAVTEQ - the worldwide gps navigation and traffic data supplier

With its recent acquisition, Google now has the "trifecta". Google has

> Motorola Mobility - PDA hardware platform vendor

> Android for the OS

> StreetView - Google collects and provides their own nav and traffic data

Availability of navigation data (coverage + content + quality) and gps nav apps are key and absolutely essential for a platform to sell

MS needs all 3 to compete as an "equal" with Google. Only buying Nokia (with NAVTEQ) gives them

> Nokia - for the PDA handsets

> WP7 for the OS

> NAVTEQ for nav and traffic data

Any other purchase would still leaves MS dependent on a 3rd company for their nav data and traffic

Remember this thread in April, 2011? " [link] " Nokia CEO Stephen Elop said

"I'm not aware of a strategic interest that Microsoft would have in the rest of the business,"

It wasn't true then and even less so now. In fact, his quote then [post=1028346]only made me suspicious[/post] And look where things are now just 4 months later!

Archean Archean, TechSpot Paladin, said:

Very valid point LA, I have been arguing this from another angle on another forum .

IMO Nokia is much bigger, more recognized brand the world over, then Motorola ever was. So if MS buys it it gets access to most of emerging markets instantaneously on top of the stuff the will get. Even more interesting scenarios is that now Big G has Motorola, they can be very competitive to likes of Samsung + LG + HTC etc. in US. This can also mean opportunity for other operating systems to come to fore, e.g. Bada (I've tried it, it is not as polished but it isn't bad at all), or WP-M (which has much more polished and fluent interface than Android IMO).

LookinAround LookinAround, TechSpot Chancellor, said:

Hi Archean

I hadn't thought of it from that perspective. You're right. All good points as well in thinking MS has alot to gain from buying Nokia

Guest said:

step 154 toward skynet :D

Burty117 Burty117, TechSpot Chancellor, said:

LookinAround said:

MS has a strategic advantage in buying Nokia over any other company: Nokia owns NAVTEQ - the worldwide gps navigation and traffic data supplier

With its recent acquisition, Google now has the "trifecta". Google has

> Motorola Mobility - PDA hardware platform vendor

> Android for the OS

> StreetView - Google collects and provides their own nav and traffic data

Availability of navigation data (coverage + content + quality) and gps nav apps are key and absolutely essential for a platform to sell

MS needs all 3 to compete as an "equal" with Google. Only buying Nokia (with NAVTEQ) gives them

> Nokia - for the PDA handsets

> WP7 for the OS

> NAVTEQ for nav and traffic data

Any other purchase would still leaves MS dependent on a 3rd company for their nav data and traffic

And If this does happen (and I agree with you I think it will) then I will still choose Microsofts platform over Android any day :P

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