2011 was a wild, wild year to follow the technology industry. AT&T failed to buy T-Mobile USA, things got rough for RIM and Apple and Samsung fought legal battles all over the world. Still, one of the biggest stories of the year began when Google announced in August that it planned to purchase Motorola Mobility, a member of the open handset alliance, for $12.5 billion. Pundits immediately needed to know one thing: what did Google’s other Android partners think? Surprisingly, HTC, Samsung, LG and Sony Ericsson all voiced support for the acquisition. But why? At first it appeared that Google just wanted to control the entire Android experience, from software to hardware, but CEO Larry Page soon put a second piece of the puzzle into place: the acquisition could offer Android partners a safe haven against litigation from Apple and Microsoft.
Page explained in detail that Google needed Motorola Mobility’s patents in order to protect itself and its Android partners from patent predators like Apple and Microsoft. Google’s Senior Vice President and Chief Legal Officer David Drummond had accused the companies of trying to strangle the success of Android by creating patent lawsuits instead of truly innovating and competing in the smartphone market. While many would argue that Microsoft and Apple are both innovative companies, Drummond had a point. Apple currently has 21 patents-in-suit against Motorola Mobility and Microsoft has already strong armed major Android players, including HTC and Samsung, into patent licensing deals. With Motorola Mobility’s patents under its wing, Google could finally have some firepower of its own in court. But can Google really protect Android by purchasing Motorola Mobility? At least one expert has suggested the company might be buying a lemon.
David Martin, CEO of patent consulting firm M-Cam, argued that Motorola Mobility already sold off all of its valuable patents. “What they bought is crap, because at the end of the day Motorola sold off its good assets,” Martin told Bloomberg in an interview. “Back in the early years, Motorola sold off some MPEG patents to GE in a securitization deal. After that, they took a bunch of the Freescale patents and sold those off.” Martin suggests that Google may have actually now face more patent lawsuits as a result of the acquisition.
Apple clearly has at least some concerns about the deal, though. In September it asked a judge to halt two lawsuits – one filed by Motorola Mobility and the other by Apple — and said “Apple should not have to face the threat of an injunction based on the claims of a party that now has no standing to bring those claims.” Those lawsuits could sit in limbo for a while. Despite gaining early approval from Motorola Mobility’s shareholders with 99% of shareholders voting in favor of the deal, the purchase is still far from a being done deal.
In September the Department of Justice said that it wanted more information on the deal. “While this means we won’t be closing right away, we’re confident that the DOJ will conclude that the rapidly growing mobile ecosystem will remain highly competitive after this deal closes,” Google senior vice president Dennis Woodside explained. “We’ll be working closely and cooperatively with them as they continue their review.” The acquisition also hit a speed bump in Europe when the European Union announced that it was suspending its investigation of the acquisition entirely until more information is made available.
So what’s next for the Google/Motorola partnership? The latest rumors suggest that Google has plans to market its own Nexus-branded tablet, and the device could land on store shelves in mid-2012. Unfortunately, while Google’s partners may have patent protection, the new tablet could cannibalize sales of their slates. Rumors suggest that the Nexus tablet will run a new version of Android that will, initially, only be available on the Google’s device. That means consumers could gravitate to the newer software available on the Nexus as opposed to older builds available on tablets from other vendors.
Will Google’s planned acquisition gain government approval? Does it have a tablet up its sleeves? If it does complete the acquisition, will Google will come to bat for Barnes & Noble, which is currently the target of a Microsoft patent lawsuit, or help defend Amazon’s Android-powered Kindle Fire? We’ll certainly find the answers to those questions and more during the next 12 months, which will no doubt prove to be just as exciting as the past 12.