Google is buying handset maker
Motorola Mobility for $12.5 billion in cash. That's a 61% premium.
Needless to say this is a game-changer in the mobile world, as
Google moves down the stack, and is no longer just an operating system provider meaning it competes directly with
Apple as well as the various other handset makers who currently use
Android.
What's more, one of the biggest arguments in favor of Apple's continued to dominance is that without a complete end-to-end "stack", no other platform could compete with its integrated software/hardware setup.
Bear in mind that Google has over $35 billion in cash, so this answers one question about what they'll do with it. The company still has tons more dry powder.
Other handset makers, like RIMM and
Nokia are both up pre-market on the news as the focus obviously turns to
Microsoft: Is it now forced to buy one of them? Or does
Microsoft benefit because the remaining handset makers (
Samsung, etc.) now turn more towards
Windows?
Another angle that will be scrutinized is MMI's patent portfolio, and how that plays out.
That's one of the key points
made by Larry Page in his post on the subject:
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.
SOURCE