Google is now a hardware company as it announces acquisition of Motorola Mobility and its patents

Google is to acquire Motorola Mobility, a major manufacturer of Android handsets. Why? I believe this is the key statement:

We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to “protect competition and innovation in the open source software community” and it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.

What are the implications? This will assist Google in the patent wars and perhaps give it some of the benefits of vertical integration enjoyed by Apple with iOS; though this last is a difficult point. The more Google invests in Google Motorola, the more it will upset other Android partners. Google CEO Larry Page says:

This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business.

It is unlikely to be so simple; and the main winner I foresee from today’s announcement is Microsoft. Nokia’s decision to embrace Windows Phone rather than Android looks smarter today, since for all its faults Microsoft has a history of working with multiple hardware vendors. The faltering launches of HP’s TouchPad and RIM’s PlayBook have also worked in Microsoft’s favour. I do not mean to understate Microsoft’s challenge in competing with Apple and Android, but I believe it has a better chance than either HP or RIM, thanks to its size and existing market penetration with Windows.

Microsoft will be clarifying its mobile and slate strategy next month at the BUILD conference.

Today’s announcement is also a sign that Google takes Android’s patent problems seriously, as indeed it should. The company’s policy of act first, seek forgiveness later seems to be unravelling. Oracle has a lawsuit against Google with respect to use of Java in Android that looks like it will run and run. FOSS patent expert Florian Mueller argues today that Android also infringes the Linux license, and that this is a problem that cannot easily be fixed. Samsung’s latest Galaxy Tab has been barred from the EU; not entirely a Google issue, but it runs Android.

Note of clarification: Google is acquiring Motorola Mobility, not the whole of Motorola. In January 2011 Motorola split into two businesses. Motorola Mobility is one, revenue in second quarter 2011 around $3.3 billion. The other is Motorola Solutions, revenue in second quarter 2011 around $2 billion.

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