There’s been a bit of buzz among the techies this week regarding Google’s acquisition of Motorola Mobility, formerly the telecom stalwart’s Mobile Devices division.
The move signals the search giant’s desire to supercharge its Android mobile operating system, but there’s more at play here. Since the announcement – coinciding with significant turbulence in the markets – Google’s value has dropped considerably, indicating that the finance community is not impressed with the acquisition or the price paid (there was a significant premium for the Motorola shares).
So if the move wasn’t made for the bottom line, what other factors were behind this decision?
If you don’t follow the business side of the mobile computing industry, well, I’ve probably lost you already. But for those who stuck around (related: thank you!) and don’t know, there’s a major legal battle brewing over patents filed for smartphone features that we all take for granted. This is stuff like capacitive touchscreens, software (as opposed to physical) buttons for navigation, and the different functions of ‘swiping’ your fingers across the screen. All these features are in dispute, and Apple (and its mountain o’ cash) is leading the litigious charge.
In defending the single best selling smartphone out there, the iPhone, Apple claims that its desire is not to be anti-competitive, but rather to push peers to come up with their own innovations. Well played, Apple. Well played.
To that end, they’ve sued everyone responsible for the Android food chain (Google, Motorola, HTC, Samsung, and more) for copying parts or features of the iPhone. They even teamed up with former nemesis Microsoft to buy up the intellectual property of former telecom and networking giant Nortel, to the tune of $2.6 billion for some 6,000 patents. Clearly, the game is afoot and it is played with a lot of zeros. Taiwanese smartphone and tablet maker HTC, for their part, snatched up 265 patents for $300 million by buying S3 Graphics, a company that has had recent success against Apple in copycat court.
Which brings us back to Google: what are they getting for their $12.5 billion investment in Motorola, besides bringing a major Android licensee in-house?
A: 17,000 patents with another 7,000 pending.
That’s some serious firepower.
What does this all mean for the consumer? Probably nothing. There’s a lot of money changing hands and a lot of lawyers involved here, but at the end of the day, neither side seems to have a distinct advantage. Patents seem to be either super-specific or overly broad and litigation tends to lead more to deal-making than product-breaking. Apple tends to be particularly tough to work with in this regard, but if they had a really strong case, chances are they would have never let Android smartphones achieve their current level of success, leading as a platform, if not a singular device. The only potential downside I see is that instead of improving their devices and pushing the envelope and technology forward, they’re spending their capital on expensive pieces of paper and international bickering.
But, as anyone who’s ever had to replace a smartphone knows, if the cost of these devices is any measure, there’s plenty of money to go around.