Custom essays on The financial impact of Google’s acquisition of Motorola mobility.

As a matter of fact, nowadays, there are expressed different opinions, why Google needed this asset. In his blog, Google CEO Larry Page officially declared: “Devotion of Motorola to Android system in mobile devices is one of many reasons why the deal between the two companies looks organically”. Moreover, official purpose of the transaction was described in the official release as “recharge” of Android ecosystem with new energy for the benefit of users, developers and partners. However, in a blog post, the head of the company can trace a clear idea of what Google needed patents owned by Motorola. For example, Paige says of the 80-years history of Motorola, which made a significant contribution in the process of telecom innovation and intellectual property, with which the mobile revolution was possible. Finally, Paige clearly indicates who is afraid of Google in a patent race: “Our acquisition will improve competition in the market, strengthening the patent portfolio of Google, that allow us to better protect Android by anticompetitive threats from Microsoft, Apple and other companies”, according to Sinead Carew, Alexei Oreskovic (2011). By the way, previously Senior Vice President and General Counsel of Google David Drummond, did not hesitate in terms; he spoke of how in his opinion, the patent wars between IT giants affected the business of his company. According to Drummond, the “bickering” between Microsoft and Apple, which lasts over two decades gave the industry time to adjust, but the success of Android provoked a campaign with false accusations about patents, organized by Microsoft, Apple and Oracle. Moreover, according to unofficial information, Microsoft was also interested in buying Motorola Mobility.
It is essential to note that in July this year, Microsoft announced its plans to deduct from Samsung $15 license fee for every Android-smartphone. After that, Drummond declared following: “Patents were designed to help innovation, but now turned into a weapon, stopping them… They want to complicate the manufacturers to sell Android devices. Instead of competing with new opportunities, they fight through judicial red tape”, according to Sinead Carew, Alexei Oreskovic (2011). It should be mentioned that current U.S. legal system admits that one smartphone can theoretically produce up to 250 thousand claims related to patents. Motorola Mobility has about 17 thousand patents, and 7.5 thousand patent applications. Many of them are minor, but there are also significant, which, for example, can help to improve voice quality. Moreover, there is a belief that all the hype and commentary around the patents are designed to hide the unpleasant fact: Android still will be a proprietary system, despite official assertions on the contrary. Analyst Tavis McCourt of Morgan Keegan Equity Research says: “Google does not publicly admit plans to make the Android closed system. But after a couple of years, when Motorola will expand its sales channels in Europe, Google will close Android, or on their phones will offer special features, which are not available to partners using Android”. It should be mentioned that such script was used with buying QNX Software Systems by RIM over a year ago. Officially, the company denied that the purpose of buying linked to the development of OS for RIM, but now this is the fact, according to Evelyn Rusli, Claire Miller (2011).
As a fact, one of the main advantages of buying has intellectual property Motorola Mobility – more than 17 thousand registered and 7.5 thousand pending registration patents. Moreover, it is important to note that Motorola has filed in October 2010 against Apple three lawsuits and a complaint to the Commission on International Trade in the U.S. (ITC), which accused the producer of the iPhone and iPad of violating 18 of its patents. Licenses for four of these patents were later purchased by Motorola Mobility, evolved from the “big” Motorola in early 2011, the Canadian producer of BlackBerry smartphones company Research in Motion. In addition, Motorola Mobility managed to accuse Microsoft on violating its patents on video technology, demanding to ban sales of game console Xbox. Over the past year ITC, which has the authority to block imports and sales of certain products in the U.S., reviewed dozens of complaints from manufacturers of smart phones, tablet and software for them. In addition, experts predict a wave of acquisitions successful IT-company rivals in crisis. It is expected that due to a strong patent portfolio amid falling share prices and profitability of the following candidates for absorption may be Finnish mobile phone manufacturer Nokia, the Canadian company Research in Motion and photographic equipment manufacturer Kodak. I believe that the first bidder for one of these companies is Apple. Steve Jobs’ company in light of recent events may make a deal with the Nokia or RIM in order to consolidate its already solid patent portfolio, according to Tim Stevens (2011).