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Google to pay $12.5B for Motorola Mobility

Posted: 16 Aug 2011 ?? ?Print Version ?Bookmark and Share

Keywords:acquisition? mobile handset? patents? wireless standards?

Motorola Mobility currently holds 24,500 approved and pending patents around the world. These include?14,600 approved and 6,700 pending patents held by its mobile devices unit covering key industry wireless standards including 4G and near-field communications. Together, this treasure trove could aid Google in defending itself in ongoing intellectual property fights with rival mobile device developers.

"From an intellectual property standpoint, the acquisition bolsters Google's negotiating position with Apple, in the event that Apple goes after Android-based products the same way it did with Samsung in Europe," said Francis Sideco, principal analyst for wireless communications at market research firm HIS iSuppli. "If nothing else, Google will be able to assert Motorola's IP for the 3GPP and 3GPP2 cellphone specifications, which are used in both the iPhone and iPad."

Apple vs. Samsung
Apple has filed patent infringement lawsuits against Samsung, claiming that Samsung's Galaxy media tablets and smartphones copy the design of Apple products. Last week, a European Union judge granted an Apple request temporarily ban the sale of Samsung's Galaxy Tab 10.1 in Europe. Learn more about the EU ban on Samsung's Galaxy tab.

Possible bidding war?
Paul McWilliams, editor of technology investment newsletter Next Inning Technology Research said that another companyperhaps Microsoftmight enter the fray and top Google's bid for Motorola Mobility.

"I think there is a reasonable enough chance we'll see someone else come in with a counteroffer if for no other reason but to force Google to dig a little deeper," McWilliams wrote in a report to subscribers Monday. "As I see it, Google can clearly leverage Motorola Mobility from many perspectives, and the armor of Motorola Mobility's patent portfolio is nearly a must-have."

McWilliams said Google's move might also spur Microsoft to acquire Nokia Corp., the world's largest handset maker.

Billionaire financier Carl Ichan, a large Motorola shareholder who last month publicly urged Motorola Mobility to explore options for selling its patent portfolio in the wake of the Nortel patent auction, issued a statement Monday applauding the Google deal.

"This is a great outcome for all shareholders of Motorola Mobility, especially in light of today's markets," Icahn said.

In a separate statement, 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."

Google and Motorola Mobility's' boards have already unanimously approved the transaction, which is subject to customary closing conditions, including the receipt of regulatory approvals in the U.S., the European Union and other jurisdictions, and the approval of Motorola Mobility's stockholders, Google said. The transaction is expected to close by the end of 2011 or early 2012, Google said.

- Dylan McGrath with input from George Leopold and Nicolas Mokhoff
??EE Times

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