Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on August 12, 2011.
Google sees the acquisition as a step to “supercharge the Android ecosystem” which it vowed to keep open for licensing by other handset manufacturers. Google will run Motorola Mobility as a separate business.
Motorola Mobility brings a a long history of innovation in mobile phones, including its DynaTAC, StarTAC and RAZR phones and, more recently the DROID by Motorola family of smartphones. In cable TV services, Motorola enabled the first pay-per-view event and launched the first all digital HDTV system. Its innovation also includes digital video compression and encryption, cable modems, the first HD set-top boxes with integrated DVR, and the first multi-room DVR content distribution system. The company has worked extensively on software application and services development for seamlessly integrating media content on multiple screens.
As of January 2011, Motorola owns approximately 24,500 patents and patent applications, worldwide. The patent portfolio generally relates to wireless, audio, video, security, user interface and product design, along with applications and services related to its products. The Mobile Devices business segment claims approximately 14,600 granted patents and 6,700 pending patent applications worldwide, including numerous patents related to various industry standards such as 2G, 3G, 4G, H.264, MPEG-4, 802.11, open mobile alliance (OMA) and near field communications (NFC). The Home business segment claims approximately 1,900 granted patents and 1,300 pending patent applications, worldwide.
Larry Page, CEO of Google, said, “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”
Sanjay Jha, CEO of Motorola Mobility, said, “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”
Andy Rubin, Senior Vice President of Mobile at Google, said, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”
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- During Q2, Motorola Mobility shipped 4.4 million smart phoneunits and over 440,000 tablets. It also expanded the DROID family at Verizon with introduction of DROID X2 and DROID 3, and forged a renewed relationship with Sprint and its prepaid brands, Boost Mobile and Virgin Mobile USA, with the planned introduction of 10 new devices including the PHOTON 4G.
- For the full year 2011, Motorola Mobility has issued guidance saying it expects total SP and tablet units of 21 -23 million, with 1.3 to 1.5 million tablets.
- Motorola completed its separation into a Solutions business and a Mobility business on January 4, 2011.
- In October 2010, Motorola Mobility filed a complaint with the U.S. International Trade Commission (ITC) alleging that Apple’s iPhone, iPad, iTouch and certain Mac computers infringe Motorola patents. Overall, Motorola Mobility’s three complaints include 18 patents, which relate to early-stage innovations developed by Motorola in key technology areas found on many of Apple’s core products and associated services, including MobileMe and the App Store. The Motorola patents include wireless communication technologies, such as WCDMA (3G), GPRS, 802.11 and antenna design, and key smartphone technologies including wireless email, proximity sensing, software application management, location-based services and multi-device synchronization.
- In November 2010, Motorola Mobility filed complaints against Microsoft alleging infringement of sixteen patents by Microsoft’s PC and Server software, Windows mobile software and Xbox products. The Motorola patents directed to PC and Server software relate to Windows OS, digital video coding, email technology including Exchange, Messenger and Outlook, Windows Live instant messaging and object oriented software architecture. The Motorola patents directed to Windows mobile software relate to Windows Marketplace, Bing maps and object oriented software architecture. The Motorola patents directed to Xbox relate to digital video coding, WiFi technology, and graphical passwords. Motorola Mobility has requested that Microsoft cease using Motorola’s patented technology and provide compensation for Microsoft’s past infringement.