Buy term paper on The financial impact of Google’s acquisition of Motorola mobility.

It is essential to note that recently, the Google’s top management, whose Android platform is the most widely used mobile operating system in the world (38.9% of the global smartphone market according to IDC), has repeatedly complained that market participants carried away with the use of patent disputes in the “arms race” that harms consumers and expend energy on forcing constant litigation. The company has consistently promised to support and technical assistance to its partners, who produce devices with Android, and are involved as defendants in lawsuits from both companies and competitors like Apple and Microsoft, and patent holders are not producing their own products. As a fact, in June 2011, Google offered $900 million for the patents of bankrupt manufacturer of equipment for mobile phones Nortel Networks. However, the group of competitors, including Apple, Microsoft and Research in Motion, offered a much higher amount – $4.5 billion. In the near future is also expected the battle for the package from the 8800 patent, which is offering the company InterDigital, according to Mike Isaac (2011).
According to experts, 18 key patents Motorola Mobility recorded since 1994, and the underlying claims of the company to Apple and Microsoft. They describe the key technologies for the mobile industry – 3G-communication, geolocation and services e-mail, antenna design, touch screen control, and application development. Now any company before giving the patent lawsuit against Google, must thoroughly weigh their own options. Earlier this month, Google openly accused the organization of competitors in a “hostile campaign” to oust the Android Market with patent lawsuits. Two competitors – Oracle and Skyhook were suing Google directly. Patent claims Microsoft and Apple to the Android-devices manufacturers – Samsung, Motorola, HTC and Barnes & Noble – without prejudice to Google directly, but according to the General Counsel Internet giant David Drummond “pose a threat to the Android ecosystem”. The price of the question – is significant contributions in favor of patent holders with each sales unit, which is running Android, according to Lex Friedman (2011).buy term paper
It is essential to note that the most vividly the reaction of investors on Motorola’s acquisition was reflected in the movement of shares of the largest manufacturer of Nokia cell phones and Research in Motion. These companies may become following objects of acquisition, because they are in a similar situation with Motorola Mobility. Due to internal crises and the inability to compete with the more successful players, the market price of these companies are relatively low, and a strong patent portfolio makes them attractive targets for investment. On August 15, shares of Nokia in one day increased by 17.4%. At the same time from the beginning of the year and before the close of trading August 19, shares of the Finnish company, which is experiencing a prolonged corporate crisis, lost almost half the cost on NYSE. A similar dynamic was observed stock price and the Canadian company RIM. Its shares rose on the eve of more than 10%, and about the close of trading on Friday – at 12%. At the same time, the company lost 58% in the capitalization under the pressure from Apple and manufacturers of Android-devices in 2011. The most likely potential buyer of Nokia is Microsoft, which is interested in expanding the patent portfolio. The company in February signed a strategic agreement, which involves the phasing out of the Finnish company’s own system Symbian. In addition, the company cooperated in the field of intellectual property. As a fact, Microsoft has funds for purchase, which in the case of transactions, as well as Google, will bring together under one roof to develop platforms and devices. According to the latest financial report, at the end of the 2010-2011 fiscal year, which Microsoft finalized on June 30, the company operates about 52 billion dollars in cash and short-term investments. In the event of a takeover Nokia by Microsoft, Research in Motion will benefit in the transaction, in particular from consolidation in the background of competition between Android-devices.
However, market experts do not recommend RIM to consider the merger as a possible development strategy. Against the backdrop of market consolidation manufacturer of BlackBerry smartphones will be difficult to act alone. In the case, if RIM will be as generous buyer, such as Google, its estimate could exceed $20 billion over the current market capitalization of $14.2 billion. The value of patent portfolios of RIM can be estimated at 10 billion dollars, according to Brian Womack, Zachary Tracer (2011).
I presume that with this deal Google has become the partner of a competitor and it may provide preferences to Motorola, the possibility of which was mentioned above. Officially, the producers unanimously supported the deal. Google even made a separate page, in which gathered praise in honor of the transaction from Samsung, Sony Ericsson, HTC, LG Electronics and others. However, there were not comments from major competitors in the Google mobile operating systems – Microsoft and Apple. Almost every withdrawal is mentioned that the deal is a positive for the market, because meets the interests of all market players, all participants in the Android ecosystem. As a fact, the worst thing possible strengthening of Motorola positions will have to HTC, which has more than 80% of smartphones on Android. I believe that this move by Google generates an impressive number of questions. What position will now have other manufacturers of smartphones on Android?, will Google be able to revive a fading brand first mobile phone manufacturer and will look like the competition of new devices from HTC and Samsung? But the main question is what will be actions of the main competitors for Google – Apple and Microsoft.
To sum it up I would like to say that acquisition of Motorola Mobility by Google has changed the balance of power between the major smartphone manufacturers. Therefore, experts believe that competitors will inevitably begin to negotiate a mutual licensing of technologies. In announcing the agreement Google CEO Larry Page indirectly confirmed that the acquisition of Motorola Mobility is a response to recent challenges from competing companies, which have become a threat to the mobile platform Android, which has recently been very active in developing and spreading around the world. According to Page, Apple and Microsoft are against the spirit of competition and the acquisition of Motorola will enable the search giant to protect its operating system from attacks. The amount of the transaction, which was announced on August 15, was $12.5 billion, i.e. for each share of Motorola Mobility Internet giant paid $40. This is a 60,4% higher than the market value of the shares of major U.S. manufacturer of mobile phones at the close of trading on the Stock Exchange on August 12. I believe that this move by Google generates an impressive number of questions, among them are: what position will now have other manufacturers of smartphones on Android?, will Google be able to revive a fading brand first mobile phone manufacturer and will look like the competition of new devices from HTC and Samsung? But the main question is what will be actions of the main competitors for Google – Apple and Microsoft.