In a bid to strengthen its mobile business and setting its sights on competitor’s apple and Microsoft Google announced on Monday that Google acquires Motorola mobility holdings, the cell phone business that was come apart from Motorola, for $40 a share in cash, or $12.5 billion. Google’s major venture into hardware comes weeks after an unsuccessful attempt to buy patents from bankrupt Nortel, and gives it an intellectual property library in wireless telephony to net war on Apple and Microsoft.
However, analysts agreed that that pays money for was more about the patents and less about the hardware. This possession would turn Google, which makes the android mobile operating system, into a full-fledged cell phone manufacturer, in direct competition with apple. The deal answers a huge question about Google’s next strategic step in wireless. The deal is certain to attract momentous anti-trust scrutiny. Android is now used in more than 150 million devices.
Google’s chief executive said in a blog that “this acquisition will not change our commitment to run android as an open platform. Motorola will remain a license of android and android will remain open. We will run Motorola as a separate business”.
“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect android from anti competitive threats from Microsoft, apple and other companies”, said Mr. Page.
The news sent shock influence throughout the tech segment on Monday. Shares of Inter Digital plunged 23 percent on the news, while Nokia shares rose over 10 percent.