News Analysis: There is little doubt that Google's proposed buyout of Motorola Mobility for $12.5 billion will significantly alter the course of the mobile industry in any number of ways. But if approved, it is sure to strengthen Android's position in the market.
has made the extremely surprising decision to
acquire Motorola Mobility for a whopping $12.5 billion in cash
. The deal
marks a 63 percent premium on Motorola Mobility's stock price at the end of the
day on Friday, and means that for the foreseeable future, Apple and Google will
be locking horns even more than many thought they would.
Google will need to suffer through the long and arduous regulatory approval
process, the company plans to close the deal by the end of this year or early
next year. When it does, it will finally be able to implement its strategy for
capitalizing on what some investors might believe is a huge sum for a company
that might or might not deliver a worthwhile return.
Google's acquisition of Motorola Mobility is already sending shockwaves
throughout the mobile space. The buyout, if approved, will likely change the
shape of the mobile industry in a number of unforeseen ways.
through the following items to find out what could result from Google's
decision to acquire Motorola Mobility.
1. Real Google phones
Nexus One and the Nexus S might be branded with Google's logo, but they aren't
really made by the company. Now with Motorola's help, the search giant can
fully control the design and marketing of its own branded phones. Does that
mean an iPhone killer is on the way? It's probably too early to tell. But
Motorola was already doing a fine job of offering smartphones
and it will
soon have Google's cash coffers on its side, it might just deliver even more
innovative devices in the coming months.
2. Serious concern from Android vendors
acquiring Motorola, Google has potentially hurt its relationships with other
vendors. After all, prior to the acquisition, Google was simply providing
software. But now that it's in the hardware business, the same company that's
offering vendors such as Samsung and HTC mobile operating system software is
now competing with them. That's not necessarily a good thing for most companies,
and it could shake up how smartphone OEMs support Android in the future.
3. Trouble for Apple
little question that
Google's Motorola Mobility acquisition is bad news for Apple
. Prior to the
announcement, Apple didn't have a single competitor with the size and influence
needed to take down its iPhone. But now that Google has made a bid for
Motorola, Apple potentially faces a competitor with the scale to seriously
challenge its position in the smartphone market. Some might be happy to see
Apple face stronger competition. But rest assured that Apple is not one of
4. An eventual end to the Motorola name
now, Google and Motorola Mobility are saying they will operate the handset
maker as an independent entity. And over the short term, one can expect
Motorola to continue offering devices under its own name. But over time, expect
that to end. Google will want to use its own branding on new handsets because
of its broader brand appeal. What's more, the search giant won't want its
devices confused with Motorola Solutions, the company that Motorola Mobility
was spun off from. Simply put, it's time to say good-bye to Motorola's