Guide: why Google has spent large amounts of money to buy Motorola while Motorola’s mobile products are not as competitive and its patent evaluation seemed to be severely overestimated. What can Google gain from Motorola’s acquisition on earth?
Why Google spent $12.5 billion on the acquisition of Motorola mobile? Even though the acquisition deal was officially announced two years ago and was completed one year ago, due to that the outcomes of the acquisition by Google has not achieved the expectant effects, questions about the acquisition have been mentioned over and over again.
Now the biggest problem is the huge gap between the value of the patent portfolio in Motorola's mobile and the value before the acquisition.
Yesterday, a U.S. judge ruled the mobile patent litigation between Microsoft and Motorola, it said that for annually-sold devices that apply Motorola mobile standard such as wifi and Xbox 360 that apply video encoding patents and devices like Windows PC, Microsoft has to pay Motorola mobile licensing fees of $ 1.7 million a year, a figure much less than $ 4 billion Motorola mobile had previously requested.To calculate with this standard, it would cost 3235 years for Microsoft to pay off the $5.5 billion which was estimated by Google’s evaluation of Motorola’s patent portfolio for the licensing fees.
The source said: "such a result shows that the value of the Motorola’s patent portfolio is far behind from the expectant value by Google.” However, Motorola mobile’s litigation concerned about the standard failed elsewhere too.
This is undoubtedly a big blow for Google, because Google intended to use the Motorola's mobile patent portfolio to compete with Apple. With the true value of Motorola's mobile patent gradually reveals itself, voices---both domestic and overseas—disapproval of the action of utilizing standard patent against competitors, began to rise. As a result, Google’s plan to reduce other rivals failed even though Google initially intended to rule a wall out of the potential patent litigation against Apple.
While what it finally achieved is just the fatigue patent licensing business.
Motorola mobile was defeated perfectly in the contest with Apple, Samsung and HTC, because it is difficult to meet ends up by the incomes of licensing business. Google has repeatedly said the company has received from Motorola mobile production line for 18 months. Google CFO Patrick Pichette, said in February this year, Motorola Droid RAZR Maxx HD, including mobile phones by Google's standards are far from a good product, but the company is ready to make innovation with the introduction of some new product lines. Motorola Mobile, since its acquisition, has been a loss of over 10 billion U.S. dollars, laid off 30% of employees. Google will pass Motorola mobile’s set-top box manufacturing business to Arris at a price of $ 2.3 billion
One of the reasons for the resignation of Andy Rubin, Google's Android business executives, may be Motorola mobile’s difficult situation because Rubin is known as one of firm supporters of the acquisition of Motorola's mobile.
Google spokesman said: "Our acquisition of Motorola's mobile is at the prospect of defending Android from outside litigation, apart from this Motorola mobile has a long history of innovation. with efficiency in the implementation of our amazing world in less than a year, we will harvest a lot.
Now the task of resending Motorola mobile back on track has fallen on the shoulders of Woodside. Since last December , it has been rumored that Google will push the X-Phone, Google Chairman Eric Schmidt also promised to push out extraordinary phone.
However Motorola mobile’s contribution not only lies in new mobile phone but lies in the contribution for the Android team in manufacturing high-end reference device. However the competitive relation with Samsung in mobile area may further deteriorate the relationship between Google and Samsung. Currently, Samsung has hidden Google operating system from its own software and services. Regarding Samsung’s dominant status in the mobile market, Google has no obvious reason to take the risk to break up with Samsung and explore the field of hardware.
So, back to the original question: What’s it for Google's acquisition of Motorola Mobile? The right answer is worth $ 12.5 billion.
