Following my post about the sale of Motorola Mobility by Google to Lenovo, I did more readings about the initial purchase and whether it was worth it, given they are selling off to Lenovo at a much lower price. Google first acquired Motorola Mobility in August, 2011 for $40 per share, for a total of $12.5 billion. According to Google, they attributed the purchase to two reasons - innovation and to protect the Android ecosystem. I would say the primary reason was to protect the Android ecosystem though. At that point in time, both Apple and Microsoft were already suing almost every Android maker, and Oracle was also seeking up to $6.1 billion from Google. With Motorola's roughly 24,500 patents, Google will be better equipped to battle against the onslaught.
With the upcoming sale of Motorola to Lenovo at $2.91 billion, many are debating whether the initial acquisition was worth it. Jean-Baptiste of Forbes did some "fuzzy math" and estimated Google to be paying less for their remaining patents than valued. Personally, I feel that the price to pay for the initial acquisition was worth the risk. Not many know the details of the acquired patents, and with the sheer amount, we are probably too lazy to find out. Nevertheless, those patents may have or will be protecting Google and the Android system in the years to come. Taking HTC vs Apple for example, HTC's injunction did not just have a short term impact, it allowed Apple to continue growing their market share. As we know, once people uses an Android or iOS, they are more likely to stay loyal to the system due to the cloud support. People usually make the switch only when there is a disgrunt with the existing operating system.
Sources:
http://www.google.com/press/motorola/
http://www.reuters.com/article/2011/06/18/us-oracle-google-lawsuit-idUSTRE75H0FP20110618
http://www.dailytech.com/Can+Microsoft+and+Apple+Kill+Googles+Android+with+Lawsuits/article22114.htm
http://basicsmedia.com/google-inc-nasdaqgoog-posts-huge-losses-with-its-motorola-unit-8619
http://techday.com/the-channel/news/was-buying-motorola-a-costly-mistake-for-google-or-a-clever-move/179073/
http://www.forbes.com/sites/jeanbaptiste/2014/01/29/google-profits-billions-with-motorola-sale-to-lenovo-keeps-patents/
With the upcoming sale of Motorola to Lenovo at $2.91 billion, many are debating whether the initial acquisition was worth it. Jean-Baptiste of Forbes did some "fuzzy math" and estimated Google to be paying less for their remaining patents than valued. Personally, I feel that the price to pay for the initial acquisition was worth the risk. Not many know the details of the acquired patents, and with the sheer amount, we are probably too lazy to find out. Nevertheless, those patents may have or will be protecting Google and the Android system in the years to come. Taking HTC vs Apple for example, HTC's injunction did not just have a short term impact, it allowed Apple to continue growing their market share. As we know, once people uses an Android or iOS, they are more likely to stay loyal to the system due to the cloud support. People usually make the switch only when there is a disgrunt with the existing operating system.
Sources:
http://www.google.com/press/motorola/
http://www.reuters.com/article/2011/06/18/us-oracle-google-lawsuit-idUSTRE75H0FP20110618
http://www.dailytech.com/Can+Microsoft+and+Apple+Kill+Googles+Android+with+Lawsuits/article22114.htm
http://basicsmedia.com/google-inc-nasdaqgoog-posts-huge-losses-with-its-motorola-unit-8619
http://techday.com/the-channel/news/was-buying-motorola-a-costly-mistake-for-google-or-a-clever-move/179073/
http://www.forbes.com/sites/jeanbaptiste/2014/01/29/google-profits-billions-with-motorola-sale-to-lenovo-keeps-patents/
I'm not too sure how useful these patents will be in protecting the technology Google, Apple, and other smartphone manufacturers develop today in maybe five or ten years down the road. I feel like the vast majority of these patents have a "useful" life expectancy of a few years; most of the patents issued now are to protect technology for the next few years. After that, the technology that is developed now will become outdated as newer, faster, and cheaper innovations take hold. For example, it was less than seven years ago that the iPhone was introduced to the world. The iPad is less than four years old; who would have ever thought ten years ago the influence tablets would have on our lives today. Social media didn't exist ten years ago. We live in an age where technology is very fluid and rapidly changing. I doubt these patents will have much influence after five to seven years of existence.
ReplyDeleteJun Yi, your last note in the article make me want to share my personal experience with Android and why I switched to iOS. Android is fantastic in a way that makes any combination of configuration possible. I as a nerdy CS major used to love fiddling with my HTC to explore different possibilities of Android. Months passed by, I grew tired of the lack of software support and the annoying latency in the user interface.
ReplyDeleteI mean I love Android and I love it can easily integrate every Google product I am using. But that kind of lock in still didn't keep me loyal to Android. After switching to iPhone, the only thing I appreciate is the ease of use, especially the responsive iOS6. Though I must say iPhone is not as flexible as Android.
Hey Rae,
DeleteNice to hear from you of your experience from both sides!
Personally, I think the limited flexibility of the Apple is a great thing, it makes things simpler, and definitely is great for new users of smartphones. Currently, Android smartphones come with an increasing number of default apps, no thanks to MADA, and it will probably shock many newbies. My dad who is pretty much new technology illiterate, still need help from me regarding his iPhone from time to time. I will probably have an even harder time if he owned an Android!
Jega, your discussion of the fleeting nature of new technologies reminded me of this article I read recently on tablets:
ReplyDeletehttp://a16z.com/2014/02/07/love-affair-with-tablet-is-over/