Google Dives into Handset Market with Motorola Acquisition

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ADOTAS – In a defensive move against its smartphone rival Apple, Google has agreed to acquire Motorola Mobility for $12.5 billion in cash – its biggest deal to date.

Google CEO Larry Page made the announcement early this morning on the company’s blog,writing, “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.”

While trying to forge ahead in the smartphone market as the owner of the Android operating system and the Nexus S, Google’s efforts have been thwarted by its otherwise empty arsenal of intellectual property in wireless telephony. This purchase will arm Google with Motorola mobility’s patent portfolio of over 24,500, lending the company to try its hand at manufacturing handset.

The deal comes just eight months after Motorola’s split into two companies: Motorola Solutions, which manufactures tech products aimed at businesses; and Motorola Mobility, which focuses solely on consumer technology.

According to Page, “This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.”

It appears that the acquisition is “welcomed” by Samsung, Sony Ericsson, HTC and LG Electronics from the “Quotes from Android Partners,” accompanying Google’s press release. But after the PR people’s smiles fade, it seems likely that the deal aiming to “supercharge the Android ecosystem” will have sparked conflict with these other phone manufacturers.

The transaction has been approved by Google and Motorola Mobility’s boards of directors, but is still subject to regulatory approval. While the deal is expected to close by early next year, the FTC is still scrutinizing Google for anti-trust violations.

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