The big news this morning is, of course, Google's announcement that it plans to acquire Motorola Mobility for $12.5 billion. The two currents running through the early analysis of the deal seem to suggest that the deal is primarily about either (a.) patents; or (b.) Google realizing it needs to compete more directly against Apple in the mobile device market.
The (a.) argument is spurred by the recent craziness over Nortel's patent portfolio, which Google lost out on to Apple and Microsoft, among others. I groused to Fred this morning that, not only do we no longer make anything in America anymore, we don't even think up anything new: Our rich dudes and lawyers just throw a lot of money at ideas that other people have already thought up, and sue each other over purported encroachments of same.
But that's neither here nor there. The patent threat seems to have been real enough to Google, so the Motorola acquisition helps them defend against it. We saw in the case of the Nortel auction, which ran to $4.5 billion, that such portfolios are easily valued in the billions of dollars. Then you add in Motorola's actual handset business assets.
Which is the more complicated part of this deal. Google's model for Android was the Microsoft model: Open development platform, hardware-vendor-neutral. Now they own a hardware vendor, which potentially moves them closer to the Apple model. The question being asked this morning is whether companies like HTC and Samsung will be satisfied making Android devices that compete against a Google company's devices, and whether Google will be able to resist the temptation to give Motorola devices priority in the Android ecosystem.
Which makes Microsoft an interesting player now. Microsoft has been getting closer to Nokia (or maybe Nokia's been getting closer to Microsoft), but will the Google deal make Windows Phone more attractive to manufacturers whose bread and butter has been Android up to now? Microsoft has certain advantages, namely its impending ownership of Skype and its close relationship with Facebook.
And what about RIM? They seem to be the most peripheral player in this latest drama, but I'll be interested to see if other commentators have a perspective I'm missing.
Michael Finneran will have a piece on the deal later today, and I'm sure other contributors will weigh in as well.
