Google takes on Apple with Motorola deal

Net giant and Android owner becomes mobile phone maker after $12.5bn buy

Google sent shockwaves through the mobile phone industry yesterday with the surprise acquisition of Motorola's smartphone and tablet computing business in a deal worth $12.5bn (£7.7bn).

Google's chief executive, Larry Page, said the $40-a-share cash deal for Motorola Mobility, would "supercharge" its Android mobile phone operating system. This marks the first time the company has owned a phone hardware business and is also its largest acquisition, dwarfing the $3.1bn paid for DoubleClick in 2007. Mr Page said Motorola would be run as a separate business, but the company would not say whether it would change the name of the80-year-old telecoms group.

The deal, according to one senior telecoms industry manager, will put Google squarely up against Apple "in terms of hardware and software". It is also seen as an important defensive move to protect itself against what the company calls "anti-competitive patent attacks on Android".

Alison Hyde, a fund manager at Cavendish Asset Management, said the "key factor here seems to be Motorola's impressive patent portfolio". The deal brings 17,000 patents, with 7,500 more pending. The fiercely competitive smartphone market has seen some of the biggest companies in the world heading to the courts over patent infringement. Intellectual property "has developed into a key battleground", Ms Hyde added.

Last week, a German court ordered European Union customs officials to seize the new tablet computers developed by Samsung, after it backed Apple's claim that the devices were too similar to the iPad.

Google missed out on a portfolio of 6,000 patents from the collapsed Nortel Networks, bought by a consortium including Apple and Microsoft for $4.5bn last month. This deal will give the company protection in the impending legal action and follows the $1bn it spent on IBM patents.

Google said the deal would "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".

Since its launch in November 2007, more than 150 million phones running the Android system have been activated around the world. Yet the deal raised questions over how handset makers would react to a rival being snapped up by Android's developer.

Yet, the major handset makers to use Android – HTC, Samsung, LG and Sony Ericsson – all issued statements of support yesterday. Experts said the new patents gave them extra security over using the operating system. Peter Chou, the chief executive of HTC, said he welcomed the acquisition "which demonstrates that Google is deeply committed to defending Android, its partners and the entire ecosystem".

Google's senior vice-president of mobile, Andy Rubin, said the deal would "enable us to break new ground for the Android ecosystem". But he added: "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."

Motorola developed the first portable cell phone almost three decades ago. It split from the business side in January. Sanjay Jha, the chief executive of Motorola Mobility, said the deal offered "compelling new opportunities for our employees, customers and partners ".

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
Tangerine Dream Edgar Froese
people
News
Rob Lowe
peopleRob Lowe hits out at Obama's snub of Benjamin Netanyahu
News
Davies (let) says: 'Everybody thought we were having an affair. It was never true!'
people'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Arts and Entertainment
Over their 20 years, the band has built a community of dedicated followers the world over
music
News
Staff assemble outside the old City Road offices in London
mediaThe stories, the writers and the changes over the last quarter of a century at Britain's youngest paper
Life and Style
The Oliver twins, Philip and Andrew, at work creating the 'Dizzy' arcade-adventure games in 1988
techDocumentary looks back at origins of the computer-games industry
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Krall says: 'My hero player-singer is Elton John I used to listen to him as a child, every single record
music
News
Friends for life … some professionals think loneliness is more worrying than obesity
scienceSocial contact is good for our sense of wellbeing - but it's a myth that loneliness kills, say researchers
Arts and Entertainment
The Wu-Tang Clan will sell only one copy of their album Once Upon A Time In Shaolin
musicWu-Tang Clan and The Sexual Objects offer fans a chance to own only copies of their latest albums
News
i100
Environment
Number so freshwater mussels in Cumbria have plummeted from up to three million in the 20th century to 500,000
environment
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us