GOOGLE WILL BUY Motorola's handset business for $12.5bn, the two companies have announced.
Motorola Mobility will remain a licensee of Android and Android will remain open, the two companies insisted, adding that Google will run Motorola Mobility as a separate business.
In 2007, Motorola was a founding member of the Open Handset Alliance that worked to make Android an "open and comprehensive" platform for mobile devices.
In 2008, Motorola made Android its sole operating system across all of its smartphone devices.
Then, in 2011, Motorola spun off its handset business after years of bleeding money. It is likely that Motorola's extensive patent portfolio was attractive to Google, which is itself is fighting for more leverage against companies such as Apple, Microsoft and RIM.
It will also give Google the freedom to use Motorola to build its own Android devices such as handsets and tablets.
Motorola Mobility holds 17,000 existing patents and has 7,500 applications pending, according to Alison Hyde, technology fund manager at Cavendish Asset Management, who said, "This acquisition may put it on a firmer footing as it continues to fight its rivals for an ever bigger slice of the Smartphone pie."
Google said on its blog today, "Motorola's total commitment to Android in mobile devices is one of many reasons that there is a natural fit between our two companies."
"Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business," Google said, adding, "Many hardware partners have contributed to Android's success and we look forward to continuing to work with all of them to deliver outstanding user experiences."
The transaction is subject to customary closing conditions, including regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility's stockholders. The transaction is expected to close by the end of 2011 or early 2012.
Larry Page, CEO of Google said, "Motorola Mobility's total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers."
Sanjay Jha, CEO of Motorola Mobility said, "This transaction offers significant value for Motorola Mobility's stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses."
Andy Rubin, SVP of Mobile at Google said, "We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices." µ
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