Google has announced its intention to acquire Motorola Mobility for $12.5 billion

Tim Renowden, Analyst, Ovum

AUSTRALIA: This move brings Google significantly closer to Ovum’s hypothesis of a “managed device platform” where a vendor controls all aspects of a platform, including hardware, software, content and online services.

Google’s rhetoric about “supercharging” the Android ecosystem implies that Google plans to work extra closely with the Motorola team. This is a delicate balancing act for Google; any hint of favoritism or signs that Motorola is getting an unfair advantage, and other key Android vendors will not be pleased.

We may see Samsung, HTC, LG, Sony Ericsson and others reinvest in alternative mobile platforms, most likely Microsoft’s Windows Phone ecosystem, to keep Google honest.

The acquisition will significantly strengthen Google’s patent portfolio, an important move in light of ongoing patent litigation across the mobile industry, particularly litigation aimed at Android and its vendor partners.

Motorola has a strong patent portfolio and a long history of producing advanced devices and technologies, but has been struggling financially for a number of years, making it an attractive target.