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Google Purchases Motorola Mobile for $12.5B to Compete with Apple & Microsoft 2011/08/15

Posted by nydawg in Information Technology (IT).
Tags: , ,

I’m fascinated by this continuing soap opera story, a piece in the puzzle, of how mobile technologies are changing everything!  In case you’re not totally up-to-date, it seems that there’s a competition between smartphone companies including Blackberry (RIM), iPhone (Apple), Nokia (Microsoft), Motorola (Google) and Droid (Google). (Yes, there’s others, but for the sake of simplicity. . . .)  Earlier this year, Microsoft announced they were purchasing Nokia for $19B.  The implication, (to me at least), was that Microsoft would install their (subpar, soon-to-be-obsolete) Windows  Phone software on a well-known & respected smartphone brand and, inevitably, would . . . .

In other words, I see this as a software company realizing that they need control over the hardware.  Like Apple’s iPhone and Microsoft’s Windows Nokia, now Google is recognizing that they need hardware! . . .

“Google made a $12.5 billion bet on Monday that its future — and the future of big Internet companies — lies in mobile computing, and moved aggressively to take on its arch rival Apple in the mobile market. . . . The acquisition would turn Google, which makes the Android mobile operating system, into a full-fledged cellphone manufacturer, in direct competition with Apple.. . . .  The deal, which requires regulatory approval, would also give Google a valuable war chest of more than 17,000 patents that would help it defend Android from a barrage of patent lawsuits. . . . That is because Google works with 39 phone makers that use different versions of Android across their platforms, resulting in variable performances, said Richard Doherty, research director for Envisioneering Group, a market research and consulting firm.

Apple, by contrast, controls its entire product — device and software. With the Motorola acquisition, Google, too, could exert greater control over its products.  But it is far from clear that Google, a $179 billion business largely built on sophisticated search algorithms and online advertising, can transform itself into a device maker. The business is costly, and the margins are slim, said Jordan Rohan, an analyst with Stifel Nicolaus.  “Computing is moving onto mobile,” Larry Page, Google’s chief executive, said in an interview. “Even if I have a computer next to me, I’ll still be on my mobile device.”





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