So – Google has acquired Motorola’s mobile phone business for a whopping $12.5 billion. Things just got very interesting in the Google, Apple and Microsoft battle.
Last week, we wrote about how Android was under threat in an ongoing patent war with a number of companies – including Apple, Microsoft and Oracle. An obvious step by Google was to embed itself in the handset business, but it’s probably fair to say that not many people saw this acquisition coming. To say this news is huge would be somewhat of an understatement.
Android now has around half of the global smartphone market. And combined with iOS, Google and Apple account for over two-thirds of the smartphone market globally.
It’s easy to explain Android’s dominance. It’s a free, open-source platform, and thus can be used by any mobile phone manufacturer, just as the likes of HTC, Samsung, Acer, Sony Ericsson, LG and Motorola already do.
The patent war…
However, Microsoft in particular has been taking swipes at Google through targeting handset makers that use Android – it’s built on the Linux Kernel, which supposedly infringes multiple patents owned by Microsoft. As such, companies such as HTC – which uses Android on many of its handsets – must pay Microsoft for each handset it sells with that operating system installed.
And in recent times, it seems the battle for supremacy has descended into simple patent acquisition to get one-up on rivals. CPTN Holdings is a consortium of technology companies that include Microsoft, Apple, Oracle and EMC Corporation. It secured a portfolio of 882 patents from Novell when it was acquired by Attachmate. Then there’s the Rockstar consortium, which also has Apple and Microsoft as members, and it recently won the auction of 6,000 patents/patent applications from Canadian telecoms company Nortel.
Google too has been engaging in similar patent-acquiring activities, recently securing over a thousand patents from IBM.
But news that Google has acquired Motorola Mobility means that besides now adding a mobile phone company to its repertoire, it also owns many, many patents.
Google just upped its patent game
Motorola Mobility spun off as an independent company from Motorola back in January, and at that time it announced it had over 24,000 patents ‘granted and pending’, though it’s thought its actual existing portfolio is around the 17,000 mark. These will now belong to Google.
Just last week, Motorola Mobility Chairman and CEO Sanjay Jha said:
“We have a very large IP portfolio, and I think in the long term, as things settle down, you will see a meaningful difference in positions of many different Android players — both, in terms of avoidance of royalties, as well as collecting them. And that will make a big difference to people who have very strong IP positions.”
Whilst the future of Android had been brought into question following developments throughout this year, Motorola Mobility is in a strong position to help defend Google and its mobile operating system. Motorola Mobility has a healthy stock of patents, much more than many of its competitors.
Not only does Motorola have far more patents than its nearest competitors, it appears to have more in the form of ‘key’ patents that could ultimately save Android.
Late last year, Motorola sued Apple for patent infringement, noting that the iPhone, iPad, iPod Touch and some Mac computers infringed on 18 of its patents. The patents cover core Apple products and services including, as Business Insider noted at the time, wireless communication technology and antenna design, smartphone technologies including wireless email, proximity sensing, software app management, location-based services, and multi-device syncing.
Shortly after though, it emerged that Apple was suing Motorola for infringing on 6 of its patents, which mainly focused on its multi-touch technology. And last week, we reported that Apple was also suing Motorola over its Xoom tablet design, which it claims copies the iPad.
So as it stands, it seems that Motorola has asserted more patents against Apple than vice versa, which is indicative of the strength of its patent armory, and is one of the main reasons why Google has acquired Motorola Mobility.
The future according to Google
We reported last week that the future didn’t look too bright for Android, some argued that this was exaggeration, but it was being rounded on by its main competitors. It had also taken to publicly pillorying its competitors in blog posts, which was a sign it was really starting to feel the heat. Google was relatively late into the smartphone market, and as such it didn’t have the patents to match its main competitors. But we also wrote: “There will likely be many more twists and turns in the patent saga.”
This is a massive twist and major turn in the patent battle, and Google has well and truly upped the game.
It is sad to see innovative companies resort to patent acquisition tactics to get one-up on competitors, but sometimes the only option is to fight fire with fire.
However, let’s not forget this isn’t just about patents. Google now has direct access to mobile phone handsets too, so who knows what other developments we’ll see in the coming months/years.
In a blog post earlier today, Google’s Larry Page said:
“The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences. I am confident that these great experiences will create huge value for shareholders.”
This is a massive step by Google, and it will be VERY interesting to see how the likes of Microsoft and Apple react moving forward.