Google acquisation of Motorola PDF

Preview

Summary

Download Google acquisation of Motorola PDF

Description

Running head: Google's Acquisition of Motorola Mobility

Google's Acquisition of Motorola Mobility Name Institution

1

Google's Acquisition of Motorola Mobility

2

Google's Acquisition of Motorola Mobility With Google entering into a formal agreement with Motorola’s smartphones and the Motorola Mobility to acquire the mobile manufacturers at $12.5 billion, will give the giant search site a platform to control he smartphone market with its own devices that are powered by an operating system that are in-house developed. This is the biggest acquisition that the Google has ever done and most contentious one. By acquiring the Motorola handset maker, Google was effectively putting itself in direct competition with the market leading Android companies such as Samsung, HTC and Acer. However, Google was sure that Motorola would not get any special favors, and according to the searching giant company, the purpose of the acquisition was to be more by buying the Motorola Mobility’s patent Portfolio than entering into the handset competition. The main agenda of the company is to make it hard for companies such as Apple or Microsoft in claiming Android invaded on its intellectual property. Any firm that was interested in making Android phones, they were forced to pay the license fee to either the Apple or Microsoft or any other patent holders. If either of the companies did so, Google could bring Motorola’s patent portfolio as a better alternative. The Motorola Mobility would lead to many Android smartphones, but would not make much money in doing so. It’s hard to get a free Android and in fact it’s an expensive operating system. According to most analysis, the $12.5 billion that the company used in acquiring the Motorola Mobility totals to almost two years’ worth of the company profits. No company, not even Google could make such a risky decision of investing such amount of money without foreseeing a direct return on the investment. Benefits of Acquisitions

Google's Acquisition of Motorola Mobility

3

Google has maintained the Android ecosystem for more than four years with the help of some of the global leading smartphone suppliers. Reversing the system by providing mobile manufacturers with operating systems that was next to zero cost license, was adaptable and with a rich future. Immediately after the acquisition, Google had more than 150 million Android devices that were activated worldwide and an average of more than 500,000 devices activated every day. The platform currently powers more than 45 percent of all smartphones manufactured worldwide. By 2011, Android phones were readily available at affordable prices and every point with various features which helped the market competition. While the smartphone companies benefited from the open source operating software, Google benefited from the revenue that they collected through the advertisement and the sales of the mobile applications. There were more than 39 manufacturers who relied on the Android and more than 200 carriers from 120 countries worldwide. By the mid of 2011, Android was the leading mobile-phone operating system having a global market share of more than 40 percent. More than 47 million Android mobile phones were sold within this quarter against 19.6 million handsets that were sold by the Apple Company. Though the Android operating systems were the common found in millions of the produced handsets, they hand few patents. Side Effects of the Acquisition Despite the deal being too friendly for the Google Company and the other mobile handset manufacturers in the short-run, there will a turning point in how the company will operate Android in the future. Though currently the platform is open, it is so chaotic. The pressure that Google and Motorola have applied to Microsoft and Apple is so complicated. Though they have won in many regions, there is a lot of war that is emerging among these leading companies. Due

Google's Acquisition of Motorola Mobility

4

to this struggle for patent rights, Microsoft has leveraged for its own patent portfolio and negotiates license agreements with almost every Android maker. Although Google believes that Android is free and open, basically, every Android device makers pay money to Microsoft for every device they make. The Google use of Motorola patents has also drawn some attention to the regulators. The Federal Trade Commission has been demanding information from Google, Motorola, Microsoft and Apple. Google is reported to use the standards –essential patents to flee away their rivals from the market, which is not allowed in the most countries' trade regulations. However the real interest of Google in Motorola was patents, these patents are not bringing any healthy revenue and loyalty to the company. The reason for asserting the Motorola patent was to protect Android from Microsoft and Apple, but this has not yet been achieved. Google use of Motorola’s patents is creating negative attention from regulators. By acquiring the Patent portfolio, Google would fight between the high-tech companies from high note to oldschool and that's totally opposite to what the patent is supposed to do. Conclusion The crackdown on the Android device manufacturers would truly lead to push of some of the forms out of the market and change to either Windows. The rise in price of Android phones would also reduce the growth of Android’s market share. But unless Google resists the attraction of making just $50 or more than from the sales of every Android device and find an alternative direct investment in selling these devices, they will not be able to recover that kind billions of cash invested in Motorola‘s patents.

Google's Acquisition of Motorola Mobility

5

References Choi, S., Yoon, Y., & Choi, M. S. (2013). An Analytical Study on Future Trends of the Smartphone Industry based on case of Google’s Acquisition of Motorola Mobility In. International Conference on Convergence Technology (Vol. 2, No. 1, pp. 1845-1846)...