Google buys Motorola: Vertical integration or Android IP play?

So Google has just bought Mobile handset maker Motorolo Mobility (see announcement on the Google blog), a move that sees Google  vertically integrating into phone hardware.

My initial reaction to this was a worry that by vertically integrating to compete against Apple, this might discourage non-integrated phone makers (such as Sony, Samsung and HTC) from using Android. The argument being that by virtue of the vertical integration, Motorola would have an advantage over other phone manufacturers who use Android (e.g. closer hardware/software integration ala the Apple model).

However, signs point to this being a patent play in response to RIM, Microsoft et al buying up the Nortell patents (which Google has complained to the Antitrust authorities about). The worry being that threats of legal action or patent fees will make Android costly to install on phones.  By acquiring Motorolo’s IP this gives Google something to fight back with (i.e. the ability to threaten to counter-sue).

So hopefully Motoroloa continues to be run as a separate company competing against Sony/Samsung/HTC etc., while Google’s control of Motorola’s patents gives these companies some more legal certainty.

For more reading check out Chris Keal’s piece at the NBR and a pretty detailed piece at the WSJ

UPDATE: A neat info-graphic which shows “who is suing who” in the smartphone wars (HT: @d7street and the NBR article already linked)

 

  • Shouldabeenapatentattorney

    I’d vote it as probably a patent play. Either way, could be a landmark shake-up in telco/tech markets.

    The most interesting angle was the DOJ reportedly investigating Google’s rivals, a not-insignificant group, for unfairly collaborative purchase of the Nortel patents – ie. group activity to counter the giant, makes the giant the victim? See article here:
    Does Nortel patent sale make Google an antitrust victim?
    http://www.techflash.com/seattle/2011/07/nortel-patent-sale.html

    • http://www.tvhe.co.nz agnitio

      I find the whole Nortel saga fascinating. If you are looking at phone markets, Google isn’t exactly a giant relative to RIM/Apple.

      The most fascinating part of it all is that Microsoft already has rights to use the Nortell patents, so gains nothing by owning them. To me that suggests something sinister!