It may be boldest move yet by a company known for being audacious. But the big prize isn’t Motorola’s lineup of cellphones, computer tablets and cable set-top boxes. It’s more than 17,000 patents — a crucial weapon in an intellectual arms race with Apple, Microsoft and Oracle to gain more control over the increasingly lucrative market for smartphones, tablets and other mobile devices.
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THE PATENTS
Analysts described the planned acquisition as a necessary defensive measure on Google’s part. Strengthening Google’s patent portfolio will enable it to better protect Android from anti-competitive threats from Microsoft, Apple and other companies. “This is the next step in building their position in the mobile world,” said Clayton Moran, an analyst at Benchmark Co.
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MOTOROLA'S GAIN
It’s a coup for Motorola Mobility CEO Sanjay Jha and the company’s largest shareholder, billionaire investor Carl Icahn, who had been pressuring Jha to cash in on the patent portfolio. With a 11.4 percent stake in Motorola Mobility, Icahn is in line to be paid more than $1.3 billion. Motorola Mobility has been struggling to come up with a product that has mass-market appeal.
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NEW STRATEGY
This marks a shift for Google, which had previously been content to license its Android operating system to manufacturers like Motorola, Samsung, HTC and LG and let them build the hardware. “By acquiring Motorola, they are making a big statement that they want to become more like Apple and less like Microsoft,” said Sandeep Aggarwal, analyst with Digital Route LLC.
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WHAT'S AHEAD
Trip Chowdhry, an analyst with Global Equities Research, said in an email that the acquisition could mark the start of a “brutal” new phase in the mobile patent wars, as handset manufacturers look to integrate new technologies like near-field communications and mobile payments into their handsets.
