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Analyst: Google's purchase of Motorola may benefit all handset makers

08-16-2011 14:19 BJT

Search giant Google is buying Motorola Mobility in an effort to gain more advantage in the fiercely competitive mobile phone market. Analysts say the move won't only benefit the two companies, but also other handset makers.

Search giant Google hopes it has found a new weapon in its battle with rivals Apple and Microsoft. It's paying a 63 percent premium to buy Motorola Mobility- giving it an intellectual property library in wireless telephony and putting its Android operating system on much firmer footing.

John Jackson, vice president of Research of CCS Insight said, "It is hard to imagine a business that is as non-core to Google as actually making phones so I think it's an open question what happens here but fundamentally we see this as having been about access to the intellectual property."

The $12.5 billion cash deal comes after a failed attempt to buy bankrupt Nortel's patents. But there is a danger that other handset makers - who license Android - could feel disenfranchised.

Google has stressed that Android will remain open to all- and that it plans to run Motorola Mobility as a separate business.

While Apple's iPhone has been a huge success, Android is actually the market leader- thanks to the support of many top phone makers including Samsung.

And while those handset makers may worry about the impact of the deal- they could also benefit by the technology backing it gives the Android platform.

Jackson said, "You could argue that the intellectual property that they are acquiring might be used to the benefit of the broader Android licensee community so this intellectual property may be used to the benefit of the likes of Samsung, LG, HTC and some of these other phone manufacturers out there who may be feeling a bit vulnerable given the intellectual property claims and lawsuits that are flying around in the industry right now."

Google also gets Motorola's set top box business, potentially giving its fledgling TV offering a much needed boost as well.

Editor:Li Wanran |Source: CNTV.CN

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