Google’s Motorola Buy May Offer Boost to Microsoft

With to the highest degree acquisitions, in that respect are winners and losers. Google's buy of Motorola is no different, but in this causa, neither of those companies comes out a victor, analysts say. "

Instead, whatever believe that Microsoft may get the biggest boost from the deal.

The US$12.5 billion attainment, which Google declared Monday, has left some analysts scratching their heads. While Google maintains that Motorola will pass over as an independent company, Google is now in the position of essentially competing with its own customers. That bran-new reality could drive handset makers like Samsung and HTC to consider early operating systems, namely Microsoft's Windows Phone.

"Competing with licensees is forever the best way to increase an ecosystem, and the satire thither is entirely implied," said Avi Greengart, an analyst with Present-day Analysis. "It's implausibly difficult and few have done IT with success."

Samsung and HTC, two of the largest Android users, are unlikely to be gratified by the tidings of the acquisition. "We expect that this skill is not being met with much joy in Korea operating theater Taiwan. If Android is going to continue its growth atomic number 3 an OS and then the continuing soggy focus by HTC and Samsung appears to us as a necessity. We anticipate that focus is immediately at some risk," Jamie Townsend, an analyst with Town Entrance hall Investment Research, wrote in a report Monday.

With each new freeing of Android, Google has favored one vendor that gets the acquittance ahead the others in convert for using all of Google's services on the device. HTC, Motorola and Samsung have all been favored partners at different points. Simply expiration wise, it's last that Google will put up the start release to any vendor but Motorola, same Chris Hazelton, an analyst with The 451 Mathematical group.

"I find it hard to believe that Google will say, 'OK [Motorola] colleagues, you'atomic number 75 on the bench. This round is going to attend Samsung Oregon HTC,'" Hazelton said.

While Google posted a WWW page with quotes of support from Samsung, HTC, Sony Ericsson and LG, those companies couldn't experience come out in opposition to the deal, Greengart said.

"The reason why you don't see anybody objecting to this — they're all offering qualified support — is because they don't have whatever choice. Non in the unmindful term. You're non going to belt Android when your fourth-canton earnings are all sledding to be Android-founded," said Greengart.

Handset makers spend around a class developing new phones and so in the short term, not a great deal will change in terms of their Android phone releases, Hazelton said. But handset makers are surely today taking a see at phones that are in the pipeline. "People are probably going back to the drafting board saying, hey, leave we launch this Mechanical man device," helium said.

Hazelton called this acquisition a defining moment in Humanoid's history that bequeath jumper cable to a slowing in its growth rate.

If they make up one's mind to shift some of their focus away from Android, phone makers are likely to take some other look at Microsoft's Windows Phone. "Forrester can hear Steve Ballmer and company pitching the Eastern players along how Microsoft is the simply hardware agnostic player left and that HTC, Samsung, and LG should increase their support for Windows Mobile as protection against Google pro its own hardware play," Lavatory Joseph McCarthy, a Forrester psychoanalyst, wrote in a blog post about the acquisition.

"I execute ask to hear Samsung take another hard deal the split between Humanoid and Windows Phones and part with putting some Sir Thomas More emphasis on the Windows incline," Greengart said. "In some shipway the big achiever is Microsoft."

The acquisition could also have repercussions in the pill market, since many of the handset makers also produce tablets. Samsung and LG, e.g., could shift toward Windows 8 when information technology becomes available instead of victimization Android on tablets, Hazelton said.

Piece the acquisition could give a boost to Windows Phone, information technology too puts Microsoft in a uncomparable position in the transferrable market. Now, altogether of the major mobile-phone OS developers are vertically integrated leave out for Windows Phone. Orchard apple tree, Research In Motion, Hewlett-Packard and now Google produce both the hardware and software for phones. "Windows Earphone is the only one left," Hazelton said.

Information technology's notable that the quotes Google posted from handset makers all praise Google for its commitment to defending Android. Google was certainly motivated by Motorola's extensive patent portfolio. Android is being attacked on many fronts as companies much arsenic Oracle, Apple and Microsoft single file patent-infringement lawsuits against handset makers and Google. Motorola's patents hindquarters help Google defend against these court-ordered maneuvers.

"The patent battles between Apple and Mechanical man could turn into a Cold War, with both sides accumulating large IPR [intellectual property rights], which they clearly intend to use arsenic weapons rather than for inferential innovation," Caroline Gabriel, an analyst with Second thought Research, wrote in a story connected Monday.

But she wondered if purchasing Motorola was the best style for Google to learn such a patent portfolio. "Endangering the steep growth curve of a market directional Oculus sinister may seem foolhardy, and that raises the question of whether Google will, sooner or later, sell along the French telephone operations themselves and just keep the patents and other software system assets," she said. If that were Google's intention though, it had simpler options. For instance, it could bear bought Interdigital, which is shopping its patent portfolio, she notable. Additionally, Google was an early bidder for Nortel's patent portfolio, which ultimately sold to a group of companies for $4.5 billion.

Last month investor Carl Icahn met with Motorola to propose that the company wait for ways to monetise its important patent portfolio, since the value of mobile patents has grownup with the some ratified battles. At the time, it was difficult to suppose how Motorola might better monetize its patents. It could potentially have sold the patents but retained rights to use them, but structuring such a apportion might have been difficult. Instead, marketing the entire company appears to cost the agency Motorola decided it could best monetize those patents.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is Nancy_Gohring@idg.com