Yesterday we woke up to a big news that was filling our twitter streams in every direction. Google announced that it was acquiring Motorola Mobility. The search and online advertising company is buying the company for approximately $12.5 billion (or $40 per share), in cash. The price represents a premium of 63 percent to the closing price of Motorola Mobility shares last Friday. Google still had about $39 billion in cash last time they announced. Looking at the overall OEM market Google will have a nice big chunk of the hardware market and access to the patents that Motorola Mobility holds.
Google states that the goal of this acquisition is to enhance the Android platform as a whole in order to provide better user experience so it makes sense to partner with a hardware company who has been producing Android phones since the late 2009.
It is quite obvious that Google is trying to fight against Apple and iOS. When Apple has the control of both software and hardware why would Google stand and watch. Google’s Nexus sales have never taken off. So if you can not make good hardware then buy a company that knows the business which is Motorola. Do you think they will come out with this magical smarthphone that will rock Apple’s presence in the market place?
“Our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community,” writes Android chief Andy Rubin in the canned statement. “We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”
It is hard to believe this commitment to Android when Google buys outright a hardware partner. We will see very soon what this will bring out?
Apple has a lot of cash on their hands how will they use this extra money to position themselves in this fight?
Also the dozens of OEMs, how will HTC, LG, Samsung, Sony Ericsson, Acer, and other Android device makers respond to this news. What would their strategy be?