Google Acquires Motorola Mobility: Android Ecosphere Or Deterioration

After Google paid $12.5 billion for the acquisition of Motorola Mobile, a new pattern of global smart phones emerged.

In order to curb the fast-growing Android alliance, Apple and Microsoft have used patented "big sticks" to make Android the most expensive operating system. What is shocking is that, as a response, Google has taken a more direct approach, directly acquiring the "mobile phone inventor" Motorola Mobile.

Overnight, the pattern of the smart phone market has undergone tremendous changes. Google through the major mobile phone manufacturers, so that the Android operating system's market share reached an unprecedented height, but after the acquisition of Motorola mobile, the already biased Android camp quietly tilted, the relationship between mobile phone manufacturers and Google has become very subtle.

Maybe Motorola's huge patent allows Google to ease disputes from patents, but new issues are starting to emerge. It is undoubtedly the most worrying thing for major mobile phone manufacturers. In fact, this issue is also very important for Google. Today, Android has a huge connection with the active participation of major mobile phone manufacturers. If you lose the support of manufacturers, the future of Android may be overshadowed.

Behind this incident, the pressure of Apple and Microsoft will be even greater. After vertical integration, Google will have more capital and Apple will compete. Microsoft may attract the gap between Google and major manufacturers. More partners.

Maybe this is just the beginning. The battle between the three camps of smart phones has already begun.

Google "arms purchase"

Google CEO Larry Page sits in the office and plays with his mobile phone and says to the secretary: “I need a Motorola.” After 15 minutes, the secretary responded that Motorola had already bought it. "How much?" "It's worth $ 12.5 billion."

This is a paragraph spread on Weibo recently. Although it is full of ridicule to Google, it also reflects the outside world's incomprehensibility for Google.

On August 15th, Google announced that it had signed a definitive agreement with Motorola Mobility to acquire the latter for $40 per share in cash, for a total consideration of approximately $12.5 billion, a 63% premium over Motorola Mobile's closing price on August 12. The transaction has been approved by the board of directors of the two companies.

Complete this "shocking" big acquisition, Google figure what? The answer is: to deal with patent warfare and integrate ecological chains.

In a statement to the outside world, Google CEO Larry Page repeatedly stressed that the acquisition of Motorola Mobile will reinforce Google’s patent portfolio, allowing Google to better protect Android against anti-monopoly threats from companies such as Microsoft and Apple.

In the communications industry, patents are playing an increasingly important role. Every year, Microsoft collects royalties from Android vendors and even exceeds the revenue generated by its own operating system. Apple did not hesitate to buy a lot of Nortel patents. The Android system, which is very likely to become the mobile Internet Windows, faces "growing pains." Apple, Microsoft, and Oracle continue to launch patent warfare to "dilute" the Android camp.

Take the lawsuits of Apple and HTC as examples. Apple passed the ITC (United States International Trade Commission) patent infringement lawsuit against HTC, claiming that HTC's 10 user software and hardware patents involving mobile phone users' operating interfaces and underlying architecture involved infringement. On July 15 this year, ITC made a preliminary ruling: "The HTC infringement case was established." Once ITC finally decides that a certain product is infringing, Android vendors such as HTC, Samsung, LG, Sony Ericsson and others may face bans in the US market.

In addition, Sun Yongjie, an independent IT analyst, believes that HTC will also pay royalties to Microsoft, which will cost about $5 per Android device.

According to this calculation, the cost of selling a smartphone for HTC will be an additional $10 more than before.

Therefore, Google’s acquisition of Motorola Mobile, which holds a large number of patents, is equivalent to giving the Android Alliance an “umbrella”.

The other question is whether Motorola Mobile will be merged with Google after Google’s acquisition of Motorola. Did Motorola's mobile phone brand disappear?

Andy Rubin, senior vice president of Google's mobile business, said that after the acquisition, the Android system's open strategy will remain unchanged, and Motorola Mobile will continue to operate as Google's independent business.

Shen Bin, Motorola's vice president of mobile communications, told Time Weekly that “Motorola Mobile is still operating as an independent company and the acquisition needs to be approved by the government. It is unclear whether the future of Motorola Mobile China will change”. As of press time, Google China has not replied to this reporter's interview on this incident.

Google vertical integration?

On the other hand, the acquisition of Motorola Mobility will help Google further strengthen the Android ecosystem to enhance its competitiveness in the mobile computing market.

Chairman of the Kingsoft Software, which just released Xiaomi Mobile and Chairman and CEO Lei Xiaojun of Xiaomi Technology, told Time Weekly that the acquisition case fully demonstrates that the competition of smart phones is a “triathlon of hardware, software and services”.

"After the acquisition is completed, in addition to the existence of a complete ecological chain of Apple in the mobile phone market in the world, a new ecological chain is being formed. This is Google's Motorola ecosystem, which has a powerful mobile operating system and has a powerful mobile phone. R & D, production and sales capabilities, there is a perfect mobile application store, there is a global application system such as Google Maps. It has exceeded Apple in the degree of product perfection." Analyst Xiang Ligang of telecommunications analysts said.

Peng Haitao, former head of mobile communications at Samsung Electronics, told Time Weekly that "There is no Motorola patent. The Android ecosystem will be unstable and the acquisition will benefit the Android ecosystem."

In addition, Google also said that "Motorola is the market leader in home equipment and video solutions business." This means that Motorola Mobile may help Google promote Google TV.

However, it seems that this transaction has encountered some problems. According to foreign media reports, a shareholder of Motorola Mobility has submitted a lawsuit to the court after the merger and acquisition, and listed Google and nine members of the Motorola Mobile Board including CEO Sanjay Jia as defendants. They sold the company to Google for $12.5 billion and the price was too low.

So far, neither Google nor Motorola have responded positively to this issue. It is understood that this M&A transaction still needs the approval of regulatory authorities in the United States, Europe, and other regions and is expected to be completed by the end of 2011 to early 2012.

Why did Motorola, who had just completed the "salvation" by self-salvage, eager to commit to Google? There are causes. While Samsung and HTC’s earnings growth, Motorola’s net loss for the second quarter of this year was US$56 million, compared to a net profit of US$80 million for the same period in 2010.

With Samsung, LG and Sony Ericsson and other competitors speeding up, Motorola Mobile's share of the Android smartphone market is declining. In the first quarter of this year, Motorola’s mobile Android market share has dropped from 33% a year ago to 14%. Moreover, China's Huawei and other competitors have also entered the Android market from low-end areas, which makes the Android mobile phone market more fierce competition.

"Because of the openness of Android and the speed of system updates, the homogenization of Android phones is serious, and the decline in the share of Motorola's mobile phones in the smart phone market should be the result of the decline in its innovation in the department. Its Xoom tablet PC is used The immaturity of Android is also dismal," Sun Yongjie analyzed.

Therefore, the merger with Google can be seen as a helpless "self-help" move by Motorola. Just two months ago, Motorola Mobile CEO Sanjay Jaya had stated that the mobile phone industry will be integrated, and it is more likely to be the integration between hardware and software. He is also uncertain whether Motorola Mobile can move in this process. Long-term independence.

Sanjay Jae also said recently that it will charge royalties from other Android device manufacturers. He also expressed his willingness to cooperate with Microsoft on WindowsPhone. This is considered outside the signal sent by Sanjay Jia, and it is likely that Motorola is already bargaining with Google and attracting other buyers.

Fortunately, according to Sanjay Jia, Motorola has 17,000 patents on mobile. More than 7,000 patents are pending approval, especially on basic 2G and 3G patents. Other non-fundamental patents provide competitive products. It is also very important, especially video compression and decompression, security technology, and leading position in 4G LTE basic patents.

This successfully attracted Google and prompted the acquisition. Google's acquisition boosted Motorola's mobile stock price by 56%.

Zhou Guangping, vice president of Millet Technologies and former senior director of the Motorola Beijing Research Center, told the Times that "As Motorola's oldest employee, I have experienced three ups and downs, and I heard that the news of the acquisition was a little lost. Previously, we had predicted that the company would be split, and look at Sanjay Jia's style. His chief executive is to sell Motorola Mobile."

Motorola Mobile China’s relevant person told Time Weekly that “At present, China business as usual, did not receive notice that there will be personnel or strategy changes. Motorola has the most precipitation in the field of communications, is also the earliest support Android system, and other companies to promote Android The development of the future Android will continue to open, Google will not favor Motorola Mobile."

Mr. Meng, president of Motorola Mobile Greater China, said that Google’s acquisition of Motorola Mobility is only a change of major shareholder of Motorola Mobility, while Motorola Mobility will continue to operate as Google’s independent business and Motorola’s brand will continue to exist. After the transaction is completed, Motorola Mobile will complete the privatization process and become a wholly owned subsidiary of Google.

Is the home of Motorola's mobile company a subsidiary of Google?

Li Yi, secretary-general of the China Mobile Internet Industry Alliance, expressed on Weibo that the future fate of Motorola branded mobile phones boils down to two possibilities: "I. After Google squeezes out the essence of patents, the Motorola mobile team will become an Android hardware support team. The brand gradually faded until it disappeared. Second, Google, under the auspices of PE, changed hands to sell Motorola's branded mobile phone business."

"For the second possibility, Chinese companies should be the biggest buyers," he said.

The "Three Kingdoms" war openers mentioned in Samsung, ZTE's (18.20, -0.14, -0.76%) and HTC's reply to Times Weekly that Google's acquisition of Motorola will help promote the positive development of the Android ecosystem. The impact will continue to support the Android system.

“For other handset manufacturers, there is a major crisis. Many mobile phone manufacturers, such as HTC, Samsung, Huawei, and ZTE, have faced a choice. Continue to adopt the Android operating system, or find another way out? If you choose to continue using Android, you may Faced with unfair competition, if you do not choose to move closer to Microsoft or create a system for yourself, such decisions are very difficult.” Xiang Ligang analyzed.

Android system will open or closed?

Lin Yi, director of Samsung's Internet business unit, told Time Weekly that the main point of the deal was patents, not whether Google would favor Motorola.

Peng Haitao, who has already switched to Lenovo's MIDH, believes: "Motorola is now operating independently. Google, as an Internet company, will not be limited to a hardware vendor. We believe that Google will continue to open and Lenovo will continue to support Android."

Li Kaifu, chairman and CEO of Innovation Works, believes that Google is an open-minded company and provides free open-source mobile operating systems to promote the ecosystem. Google has repeatedly said that as long as there are 1 billion users, making money will be very easy. Today's free and open Android system has brought backstage revenue of more than US$5 per ARPU, so for Google, having a huge market share is king. With only 15% of Motorola's smartphone share, Google is unlikely to be satisfied with becoming a single Motorola software provider. Therefore, Google must continue to be an open alliance, providing open source to vendors immediately.

One thing is certain is that the acquisition will bring good news to Microsoft Windows Phone 7, which may take the upper position. The speculation about Microsoft's more complete acquisition of Nokia's "new tier 1" is even more controversial.

Xiang Ligang said that Google’s acquisition of Motorola means that the mobile phone industry’s reshuffle is also the beginning of an industrial chain re-architecture. Apple, Google’s Motorola, and Microsoft’s Nokia’s three camps have emerged. The basic pattern of mobile phone production in the world is basically the same. Laid.

Apple's iPhone 5 and Nokia's WP7 mobile phone are reported to be available in September, and it will be a fierce battle.