The Smartphone Wars: Google Buys Motorola
<p>This morning came the news that Google has agreed to buy Motorola Mobile for $12 billion.  I was half-asleep when A&#038;D regular Jay Maynard phoned me with a heads-up,  but not surprised for a second; as I told him, I&#8217;ve been expecting this for weeks.</p>
<p>We&#8217;ll see a lot of silly talk about Google getting direct into the handset business while the dust settles, but make no mistake: this purchase is all about Motorola&#8217;s patent portfolio.  This is Google telling Apple and Microsoft and Oracle  &#8220;You want to play silly-buggers with junk patents?  Bring it on; we&#8217;ll countersue you into oblivion.&#8221;</p>
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<p>Yes, $12 billion is a lot to pay for that privilege.  But, unlike the $4.5 billion an Apple/Microsoft-led consortium payed for the Nortel patents not too long ago, that $12 billion buys a lot of other tangible assets that Google can sell off.  It wouldn&#8217;t surprise me if Google&#8217;s expenditure on the deal actually nets out to less &#8211; and Motorola&#8217;s patents  will be much heavier artillery than Nortel&#8217;s.  Motorola, after all, was making smartphone precursors  like the StarTac well before the Danger hiptop or the iPhone; it <em>will</em> have blocking patents.</p>
<p>I don&#8217;t think Google is going to get into the handset business in any serious way.  It&#8217;s not a kind of business they know how to run, and why piss off all their partners in the Android army?  Much more likely is that the hardware end of the company will be flogged to the Chinese or Germans and Google will absorb the software engineers.  Likely Google&#8217;s partners have already been briefed in on this plan, which is why Google is publishing happy-face quotes about the deal from the CEOs of HTC, LG, and Sony Ericsson.</p>
<p>The biggest loser, of course, is Apple; it&#8217;s going to have to settle for an armed truce in the IP wars now. This is also a bad hit for Microsoft, which is going to have to fold up the extortion racket that&#8217;s been collecting more fees on HTC Android phones than the company makes on WP7. This deal actually drops a nuke on the whole tangle of smartphone-patent lawsuits; expect to see a lot of them softly and silently vanish away before the acquisition even closes.  </p>
<p>And, of course, now that Google has shown it&#8217;s willing to fly cover for Android handset and tablet makers, likely there&#8217;ll be more of them signing on.  This move will accelerate Android hardware down the price curve.</p>
