When Google (news, site) announced its acquisition of Motorola Mobility, industry watchers wondered about the potential effects on the mobile industry. In particular, Google will, in effect, be competing against its own Android smartphone and tablet licensees. But the market seems to agree that the deal will benefit Android stakeholders, particularly in the Asian region.
Google was quick to allay fears over Motorola having an undue advantage over other Android manufacturers. Android stakeholders also affirmed the deal, with several brands offering their support for the move. After all, Google owning Motorola would mean several things. For one, Google will have beefed up its patent portfolio, giving the Android ecosystem better legal ammunition against any attacks from makers of other smartphone and tablet operating systems, which should also benefit other handset makers. Secondly, Google has promised to continue support for Android licensees.
Strengthened Patent Portfolio
The markets seem to find the deal to be beneficial, at least in the Asian region, where many of Google's Android licensees are based, such as Sony Ericsson, LG, Sharp, Asus, Acer and Lenovo. Shares in Korean Samsung Electronics jumped 6.1% this Tuesday. Taiwanese HTC's shares rose 3.1%. These stock price jumps were seen to be a positive response to the idea that Google's Motorola acquisition would bode well for Android patent-wise. Manufacturers are hopeful that Google will be licensing out patents to stakeholders at a reasonable price. Recall that both companies are in legal disputes with Apple for patents relating to the iPhone and iPad, and their own respective smartphone and tablet lines.
"It can certainly protect us from future patent disputes," a Samsung official comments. After all, Google's owning a bulk of patents relating to cellphones — even those dating back to Motorola's patenting the radio telephone system in the early 1970's — will give these brands a much-needed legal boost in the face of tough litigation from the likes of Apple, and sometimes hefty licensing fees from the likes of Microsoft.
Potential Asian Ownership
Meanwhile, some industry analysts and brand owners are also keen on the possibility that Google may not be holding on to the Motorola brand for long. For one, Chinese manufacturers like ZTE and Huawei are aggressive in marketing their brands for increased visibility and market share. These might be interested in a possible acquisition should Google decide to sell its mobile-related businesses later on. ZTE has already shown some interest.
But what will be the long-term effect of Google's now owning its own hardware business? Manufacturers still want to see how this will play out, especially in view of Motorola's having a potential advantage in terms of software updates and hardware compatibility. Motorola is no longer such a big brand in terms of market share, but Google being the 900-pound gorilla in the smartphone OS industry might just change that.
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