If ever there was an iconic symbol of the original mobile phone handset, it would have to be the bat wings of Motorola
. From the StarTAC to the RAZR, Motorola has been at the forefront of the technology virtually since the beginning. Though Motorola Mobility has been struggling to keep up in the ultra-competitive smartphone landscape recently, the company was quick to embrace the Android
operating system for its entire product line of smartphones and in fact founded the Open Source Handset Alliance back in 2007. If you're the type that likes to tinker with custom ROMs and such, you have Motorola to thank in-part for the privilege.
Perhaps then, today's huge announcement may come as no surprise, or maybe make a whole lot of sense, depending on your perspective. Google
just crossed the wire
early this morning, proclaiming they intend to acquire Motorola Mobility for approximately $12.5 billion in pocket change. Here's what Larry Page, CEO of Google had to say about the deal this morning...
"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."
Regardless, you have to wonder how this acquisition will shake out in the Android community, especially for companies like Samsung and HTC, that have huge investments in Android development.
Motorola, developing mobile phones since the concept existed...
One thing is for sure, when Google decides to draw a line in the sand, they can and usually do go big. Page had this to say about the competitive landscape and how this move will strengthen the company's position...
"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."
The move definitely puts Google on equal footing with Apple now, with what is essentially in-house design and manufacturing capabilities. Again, the real question is; how will other Android solution providers react to the deal? Meanwhile, Motorola will make out pretty darn well, with a 63% premium set for shares of their Mobility unit at $40 per share. That ought to help the balance sheet nicely. Motorola's official release
offers more detail.
Google to Acquire Motorola Mobility
Combination will Supercharge Android, Enhance Competition, and Offer Wonderful User Experiences
MOUNTAIN VIEW, Calif. & LIBERTYVILLE, Ill. - Aug. 15, 2011 - Google Inc. (NASDAQ: GOOG) and Motorola Mobility Holdings, Inc. (NYSE: MMI) today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies.
The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.
Larry Page, CEO of Google, said, “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”
Sanjay Jha, CEO of Motorola Mobility, said, “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”
Andy Rubin, Senior Vice President of Mobile at Google, said, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The transaction is expected to close by the end of 2011 or early 2012.