Make Way For The gPhone: Google Buys Motorola’s Smartphone Business For $12.5 Billion! [Breaking]

Make Way For The gPhone: Google Buys Motorola’s Smartphone Business For $12.5 Billion! [Breaking]

Samsung’s not going to like this: Google has just purchased Motorola Mobility for $12.5 billion, finally placing the Android maker on equal footing as Apple when it comes to controlling both the hardware and software of their smartphone platform.

Google co-founder and CEO Larry Page announced the buy first thing this morning, saying that they had purchased Motorola Mobility for twelve and a half billion dollars, or $40 per share.

Not only is that a premium of around 63% over what Motorola was worth on Friday, but it represents a sizable chunk of Google’s $39 billion cash reserves. Someone wanted Motorola bad.

Why? Patents clearly come into it: Google says that Motorola Mobility’s rich patent portfolio because it will “enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.”

This is obviously a reference to Google’s public tantrum last week about Microsoft, Oracle, Apple and other companies winning bid for Novell’s patent portfolio, which Google called “bogus” and “anti-competitive” even though the search giant had not only bid on the patents themselves, but had been asked to join the consortium that bought them.

Motorola Mobility is the arm of Motorola that produced Android phones like the Droid, Droid X and Droid 2. Page said that Google purchased Motorola because of their strength in making quality Android devices, as well as for being a “market leader in the home devices and video solutions businesses.”

This is huge news. Following Apple’s lead, all the main players except for Samsung in the smartphone and tablet industry all control every aspect of their platforms, from the software down to the hardware. The fact that giants like Google, Microsoft, HP, Motorola and Nokia have all realized that it’s not enough to do just the software or just the hardware well. but to fuse both… well, that’s nothing less than a rude awakening that has come about by being smashed in the face repeatedly by the iPhone and iPad over the past few years.

The question is: now that Google makes their own phones, how will other Android makers respond? Microsoft got away with their partnership with Nokia, but Windows Phone 7 was a non-starter… Android is the most popular smartphone operating system on Earth. Will other handset makers abandon Android for other operating systems?

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  • Jeff Perillo

    Fix your title, it reads SAMSUNG purchased Motorola Mobility, not Google!

  • Joe Kueser

    Um…typo in the headline?

  • Regavan Kumar

    should read Google… not Samsung

  • gareth edwards

    hmmm, not surprising. All Android phones will be equal but some will be more equal than others.

  • Jamie Leveille

    The title in your article is wrong

  • Alan Roberts

    I thought that as well.

  • Jack Holland

    Check your headline. It’s important to get these little things right.

  • techgeek01

    Other handsets (android) makers probably love this.

    Why?

    Because Now, Apple or microsoft does not only have to face them (android handset maker) but Google as well.

    Apple, microsoft going after HTC? They did it because HTC is nowhere near as large as Google and others.  Now, if they do it, they also have to face Google.  And with a patent portfolio that big, they will think twice before attacking (suing) android handset makers.

    Other android handset makers probably just love this.  Since they don’t have to worry about Apple or Microsoft suing them, because if they do, they’ll have to end up facing Google as well.

    This move will just strengthen Android. 

  • techgeek01

    Other handsets (android) makers probably love this.

    Why?

    Because Now, Apple or microsoft does not only have to face them (android handset maker) but Google as well.

    Apple, microsoft going after HTC? They did it because HTC is nowhere near as large as Google and others.  Now, if they do it, they also have to face Google.  And with a patent portfolio that big, they will think twice before attacking (suing) android handset makers.

    Other android handset makers probably just love this.  Since they don’t have to worry about Apple or Microsoft suing them, because if they do, they’ll have to end up facing Google as well.

    This move will just strengthen Android. 

  • AllAmericanGeek

    Pretty funny mistake.
    Should be Google buys Motorola

  • Deborah Clemons

    I just paìd $22.85 for an ìPad 2-64GB and my girlfriend loves her Panasonic Lumix GF 1 Camera that we got for $38.78 there arriving tomorrow by UPS. I will never pay such expensive retail prices in stores again. Especially when I also sold a 40 inch LED TV to my boss for $625 which only cost me $62.81 to buy. Here is the website we use to get it all from, CentHub.còm

  • Clark Taylor

    Nice headline.  This is REAL reporting!!!!!

  • Lukas Winn

    Don’t you mean Google buys Motorola Smartphone Business for $12.5 Billion?

  • theoPhobia

    I see that point, but I also see that “motoogle” now has a clear advantage over HTC, LG, Samsung, and others in making software work with hardware. If this is the case, and they make handsets that are superior to the others, then this could get all sorts of messy for them. They probably think it sounds great to the Android partners right now, but in a year or two it will be interesting to see how this has unfolded. 

  • saianth

    Correct your headline Bro!….happy to note that atleast it’s not other way around…Moto buys Google ;-)

  • Andrew Nesbitt

    I nominate this article headline as “Worst Typo of the Year” for 2011.

  • Barton Lynch

    ” The fact that giants like Google, Microsoft, HP, Motorola and Nokia have all realized that it’s not enough to do just the software or just the hardware well. but to fuse both…”
    This doesn’t make sense to me. Nokia is switching to not making its own software, and Microsoft never made any hardware.

  • Doug Bursnall

    Guess who will be getting the latest release of Android software, whilst all the other smartphone makers sit and wait.

  • Robert Norris Hills

    Sigh – All the other manufacturers have already made press releases saying they welcome this as a new era in androids development. 

    Google has already made a press release saying that Motorola will not have locked in rights for the nexus devices. 

  • CSMcDonald

    They won the bid for _NORTEL_ patents, the Novell patents were MSFT only earlier.

  • Freek Monsuur

    Handset makers will not like this because Google can release new Android phones first, but on the other hand, the handset makers will need this because otherwise Android will collapse.

  • Freek Monsuur

    Steve Jobs will like this. Hardware and software makers do big mergers because they want to copy Apple’s combined hardware+software model. They forget the true strength of Apple requires much more than that.

  • Freek Monsuur

    Apple has no reason to do similar purchases, instead they should buy BOSE to complete Apple’s circle of media devices. BOSE builds great compact speakers and car stereo equipment. Apple could add speakers to their Apple TV offering (and possibly TV screens) and create a similar AirPlay enabled speaker/amplifier set for cars.

  • SbMobile

    Apple made them realize.

  • SbMobile

    Doesn’t make sense! If Apple was going after Motorola, they’d have NO problem going after Google. Google is NOT on Apple’s level, in any way. Here’s an example: last quarter, the iPhone made Apple roughly $13B in revenue, $3B+ in profits; Google overall made $11.5B in revenue & $2B in profits. If you can’t see, Apple’s iPhone makes more money than Googles entire business! This merger did nothing for Google & it’s OEM’s future lawsuits. Google’s legal team clearly doesn’t understand anything going on past the tip of their nose. Plus, Motorola hasn’t made a profit higher than $3M in the last 6 years. End of story!

  • lals43
  • techgeek01

    If Apple was going after Motorola, they’d have NO problem going after Google.Motorola has approx.. 17,000 phone patents out there. That apparently the largest amount of patents relating to phones out there that any company has. By Google buying Motorola they can (basically) protect any of the Android companies from Apple or Microsoft.  Because if Apple or Microsoft decides to sue one of the Android manufactures, they will have to deal with someone as big as them if not bigger. That may have a lot more patents regarding and dealing with mobile devices (in this case phones) than themselves.

    Basically they are “picking” on the smaller companies because they cannot defend themselves as good as a larger company, like Google.  If Apple has no problem going after Google, why has Apple not sued Google?  It seems left and right they are suing (about) all the android manufactures, but not Google directly.  

    Google is NOT on Apple’s level, in any way. Here’s an example: last quarter, the iPhone made Apple roughly $13B in revenue, $3B+ in profits; Google overall made $11.5B in revenue & $2B in profits. If you can’t see, Apple’s iPhone makes more money than Googles entire business! 

    There are over 150 million Android handsets out there.  There is not that amount of  iPhone (handsets) out there.  Also, Android is activating 550,000 Android devices each day.  More so than Apple is activating.  Also Android is the #1 mobile OS in over 35 countries.  The just passed Symbian and have became the #1 mobile OS. (#1 is Android, #2 is Symbian)  It’s really more than just making money.
    This merger did nothing for Google & it’s OEM’s future lawsuits. Google’s legal team clearly doesn’t understand anything going on past the tip of their nose.

    Does nothing?  Did you pay attention?  Basically Google has 17,000 more patents regarding with phone technology. To add to this, apparently Google is looking (or is in the process of buying) several billion dollars worth of patents from IBM. (it was IBM or another company)  These patents are going to be used to defend themselves and all the other android handset makers.  Plus, it wasn’t a merger, since the company is going to be run completely independent from Google.  All what happen was the change of who owned it. basically not it’s owned by Google, but is still going to be run independently.

    Basically the whole damn point of Google’s buyout of Motorola is Patents.

    Google will begin to start defending Android handset makers. (if they have not already)  Buying Motorola gives Google more ammunition that they can use to defend themselves from Apple or Microsoft.  By having these patents, this can end up stopping the patent lawsuit trolling Apple and Microsoft is doing against android handset makers, because they won’t have to face the Android handset maker, but Google as well.  The last thing Apple or Microsoft want is to be tied up in court with Google, because with these patents, it could end up being disasters for Apple and microsoft, since Motorola (along with Nokia) practically invented cell phones.

  • KyleBerlin

    I païd $21.87 for an iPad 2 32-GB and my girlfriend loves her Panasonic Lumix GF 1 Camera that we got for $ 38.76 there arriving tomorrow by UPS. I will never pay such expensive retail prices in stores again. Especially when I also sold a 40 inch LED TV to my boss for $ 657 which only cost me $ 62.81 . Here is the site we use to get it al from, http://to.ly/aWOE

  • baby_Twitty

    slight correction, Microsoft do make some of their own hardwares, such as Xbox, Kinect, Zune, Microsoft mouse, keyboards, etc etc…

  • baby_Twitty

    You know what will happen next.

    Microsoft buys Nokia.
    And Facebook buys Blackberry RIMM.
    SonyEricsson or HTC and Samsung will merge.

    But the last man standing will still be Apple.

    ***

    Ok to be serious…

    Google is making a huge gamble, because, if any of Motorola’s patent could be used to sue Apple, Motorola would have already done so. But so far, its NOT the case.

    So by buying Motorola, what Google stands to gain most is any new future phone design patents. The old patents are pretty toothless.
    Also, do we need any reminder how almost every day Apple is filing new design patents like there is no tomorrow?

    Google’s gamble on owning Motorola is a double edged sword. It can propel them to new heights, but due to Moto’s low profit, the whole affair could also be a big waste of money. Like buying a very EXPENSIVE antique car that cannot even go faster than a modern day new car.

  • françois luong

    Bose is owned by the MIT, so the chances of anyone buying the company are rather low.

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.

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