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Why Google Is Buying Motorola Mobility: Notes From The Concall

In one word: patents. Following Google’s acquisition of Motorola Mobility, it will have acquired 17,500 issued patents and around 7500 patents in progress, the company explained on a recently concluded conference call on the Motorola Mobility acquisition deal. Google believes that the acquisition of Motorola Mobility will help protect the existing Android ecosystem.

Google CEO Larry Page pointed towards the scale of the Android ecosystem in a blog post: over than 150 million Android devices have been activated worldwide, and over 550,000 devices are added every day through a network of about 39 manufacturers and 231 carriers in 123 countries. Page added in the blog post:

We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to “protect competition and innovation in the open source software community” and it is currently looking into the results of the Nortel auction. 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.

Notes from the conference call:

Reaction From Android Partners: “We think that aligning with Motorola and having that kind of a patent portfolio to protect the ecosystem is a good thing.” Company executives spoke with the top five Android licensees prior to this deal, and according to Google, “they showed enthusiastic support for the deal.” Google reiterated that Android will not be a single OEM (Original Equipment Manufacturer) ecosystem. On the call, execs even said that Motorola Mobility will have to compete alongwith other OEMs for a chance to participate in Google’s Nexus program to build the next Google phone. Google follows a competitive process, and then teams from Google and the OEM work around the year to launch the phone pre-Christmas. Google does not expect this to change how Android is run.

– Lawsuits: The handset ecosystem is beset with patent related lawsuits. Google clarified that before the acquisition closes, the lawsuits will continue, and be managed by Motorola. “Post acquisition, we’re not going to talk about the legal strategy, but we will be in a position to protect the android ecosystem for all partners.”

– Manufacturing Competency: When asked about Google bringing on board competencies in manufacturing that are not core to Google, execs said that they plan to operate Motorola Mobility as a separate business, and they have the competency. “I’m interested in protecting and supporting the android ecosystem. We believe that Motorola Mobility has tremendous opportunity for growth.”

– Regulatory Approvals: “We’re quite confident that this will be approved. This is a pro-competitive transaction, and there are lots of reasons for that. Android has clearly added competition innovation and user choice, and protecting that ecosystem is pro-competitive.”

– Terms of the Agreement: Will be filed separately

More patents? “We need to build our patent portfolio to make sure that android and other businesses can be successful”

Home & Set Top Box strategy Google will look to “accelerate the innovation” in the Home and Set Top Box space. Sanjay Jha mentioned that Motorola Mobility has a close relationship with carriers in the Home space, and in addition to Motorola’s QAM, there is a convergence happening between mobile and set top boxes for content that enters the home through STBs.

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