What made Google to acquire Motorola Mobility ?
- By: satinder kaur
Pick any e-magazine today and you'll find out where the tablet market is heading. A few years back when Microsoft was the sole determiner of IT revolutions and Google was labeled a mere search engine; things remained pretty much predictable. But the invasion of slates simply turned the tablets around. What was a monopoly of US mobile makers like Motorola is not trailing behind Finnish and Korean smartphone champs.
To keep pace with the tablet trend (known as a passing fad among skeptics), Google Inc. has devised a strategical acquisition over Motorola Mobility and it can be said that we'll soon have the big search station spreading its wings in tech and gadget designing as well.
The Search giant, Google has recently announced that it is in talks to acquire Motorola Mobility for $12.5 billion. The deal is expected to prove beneficial for both the candidates ( Google & Motorola) as it can give a tough fight to other contenders such as HTC, LG, Sony Ericsson and Samsung, which also ship Android based devices.
Analysts suggest that Google have to play smartly at this time and keep other Android licensees (HTC, LG, Sony Ericsson, Samsung etc.) pleased.
Analysts consider Research in Motion, Nokia as potential winners of Google's Motorola acquisition, while other handset makers like Microsoft, HTC Corp, Samsung Electronics and Sony Ericsson are considered as the losers of the deal.
Let's first take Samsung, HTC, LG and Sony Ericsson's stake which also ship Android based devices. These techies advertise their devices as Android powered handsets. Now after the acquisition, these contenders will indirectly benefit their director competitor, Motorola. On the same, Google will essentially favor Motorola.
Motorola's line of Android phones are well-designed and yet affordable and generally a better options for those pocket friendly users who can't own a pricey handset. Now, after the deal, Motorola Mobility will have Google behind it and everyone will expect a good level of quality from imminent Motorola handsets. This could help Motorola to improve its sales and thus may hurt sales of other honchos like Apple, Nokia, BlackBerry etc.
It is important to note that Samsung is the major threat to Apple's supremacy in smartphone segment. But, now with Google's entry, Apple's concerns in the mobile space just got double.
The tech giants, Microsoft and Motorola are already involved in a number of claims on each others' technology. Google's move to strengthen Motorola will definitely make the court battle tougher for Microsoft.
Shares of BlackBerry maker, RIM jumped after the news of Google's Motorola acquisition. RIM shares were up by 3.3 percent, at $25.36, while Nokia jumped 10.3 percent, to $5.91. The BlackBerry maker holds control over 2,033 patents, covering everything from mobile security to e-mail. Google's move may push Apple or Microsoft to go after RIM for its intellectual property.
Well, some analysts have figured out a negative side of the deal. Through Motorola's acquisition, Google may now compete with its rivals in hardware manufacturing business, which is an entirely different kind of business than Google's core business. It is observed that hardware manufacturing is a crappy, low-margin commodity business.
However, nothing can be said as of now, it will take months until we know whether Google's biggest acquisition ever has been a wise decision or not. Let's see, what happens next.
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