Google stunned the tech community this morning with the news that it will acquire Motorola Mobility for $12.5 billion. The company insisted that Motorola will continue as a separate company and that Android will remain an open platform, but the first question for many was how might this affect other handset makers with a major Android portfolio, like Samsung and HTC?
According to Google's Andy Rubin, the major Android players were "very enthusiastic" about the deal and the rather canned responses posted on Google's Web site from Samsung, Sony Ericsson, HTC, and LG said all four companies "welcome" the news. Many in the analyst and tech community, however, greeted that sentiment with a nice, big, "Yeah right."
"Samsung HTC LG SEMC might be unhappy about Google/Moto but not much they can do when their smartphones sales are so dependent" on Android, Gartner research vice president Carolina Milanesi tweeted today.
Her colleague, Michael Gartenberg, echoed those sentiments, arguing that there is "not a lot of choice" for those who are unhappy with the Google-Motorola deal.
What did those companies have to say? All the statements—from Samsung's J.K. Shin, HTC's Peter Chou, Sony Ericsson's Bert Nordberg, and LG's Jong-Seok Park—said the deal will help Google to defend Android and its partners as it relates to patent squabbles. But the responses were extremely strained ("I welcome Google's commitment to defending Android and its partners") and aren't exactly what you might describe as "very enthusiastic."
Brian White, a senior research analyst with Ticonderoga Securities argued that Google "runs the risk of alienating other existing Android customers such as Samsung and the many other players in the market."
But can Samsung afford to drop its Android portfolio, which has resulted in big gains for the company in recent months? According to recent IDC numbers, Samsung had a huge year thanks to the success of its Android-based Galaxy S line of smartphones. The handset maker shipped 17.3 million devices, a 380.6 percent change from the 3.6 million smartphones it shipped in the second quarter of 2010. That, IDC said, was the largest year-over-year growth of any vendor in the top five.
But as the analysts noted and the smartphone stats highlight, the elephant in the room is Apple.
"We believe this deal speaks to the concerns Google had in competing with Apple in the long run, however, Google will now have access to both the software and hardware piece to the puzzle," Ticonderoga's White said.
Milanesi also argued that the patent portfolio acquired by Google will help it "in the battle with Apple." She pointed to a June deal between Nokia and Apple, under which Apple must pay Nokia an undisclosed amount in licensing fees for all past and ongoing use of Nokia technology.
The patent portfolio (upwards of 17,000 patents) is really the big win for Google, which has been trying to build up its patent holdings for some time. Earlier this month, Google accused Apple, Microsoft, and other tech giants of trying to "strangle" Android with its coordinated patent purchases and pledged to "intensely" defend its mobile OS through patent purchases of its own and opposition to what it considers anti-competitive patent bids.
For its part, a Microsoft spokesman said the company has no comment to offer on the deal.
Motorola has also had its time with Apple in the courtroom. Motorola sued Apple for patent infringement in October over Apple's iPhone, iPad, and iPod touch. Apple coutersued several weeks later, saying that Motorola multi-touch smartphones use Apple-owned intellectual property. Apple's patent complaint against Samsung in Germany, meanwhile, reportedly includes a little nugget that says Cupertino has also sued Motorola over the design over its Xoom tablet.
What about the wireless carriers supporting these Android phones? So far, they are staying mum. AT&T, Verizon, and Sprint declined to comment, and T-Mobile did not immediately respond to a request for comment.
For more, see Google Acquires Motorola Mobility: What You Need to Know, as well as Google's Motorola Deal Closes a Door, Opens for Windows, and Why Google is Buying Motorola Mobility.