Google is entering the mobile handset manufacturing business with the $12.5bn acquisition of Motorola Mobility. Larry Page, Google’s chief executive of all of four months, has already penned a blog post hailing the potential for the deal to “supercharge the entire Android ecosystem”.
From 1.30pm London time (8.30am New York time) I was live-blogging the conference call between Motorola and Google executives to hear the full rationale behind this blockbuster deal.
14.03
Larry Page wraps up the call after just half an hour: “We really believe that Motorola Mobility is placed for tremendous growth. They are also a leading home devices maker: that is also a great opportunity.”
14.01
One analyst wants to focus on the opportunity for Google’s TV ambitions in the home.
Larry says: “Motorola is market leader in home devices and TV solutions.”
Sanjay adds: “We have a very close relationship with our carriers in the home space.”
He talks about the move towards IPTV and a “great convergence between the mobile world and the content that enters the home through the set top box”. He says the deal will accelerate that transition.
14.00
Andy Rubin seems to suggest that Google’s recent “Nexus” devices that have been developed closely with Samsung and HTC will continue. “We have the
Nexus programme and the lead device strategy. That has worked well to focus the team. Around Christmastime we select a manufacturer to work closely with. The teams huddle together in one building, jointly work on these development efforts, they go on for 9 to 12 months and right before the holiday season, devices pop out based on this effort. We don’t expect that to change at all. Android remains open to other partners to use as they are today.”
13.59
Larry Page defends the all-cash price Google has paid.
“We expect the deal to be mildly accretive on a non-gaap basis… We believe we have a fair and full price for this transaction.”
13.54
Google says it is “quite confident” that this purchase will be approved by regulators around the world and that the deal is a “pro-competitive transaction” – Android increases user choice so protecting that ecosystem is improving competition, so their logic goes.
13.53
Question on whether there is a threat to other Android partners, such as HTC, Samsung and LG?
Andy Rubin, Google’s mobile boss says: “I spoke yesterday to the top five Android licensees and they all showed very enthusiastic support for the deal. It doesn’t make sense for it to be a single OEM [original equipment manufacturer], we want to take it as wide as possible.” It will be “business as usual for Android” he says – protecting the ecosystem and extending it.
Larry Page emphasises: “Android is still open.”
13.50
Sanjay Jha, Motorola’s CEO adds: We have over 17,000 issued patents worldwide. On top of that we have 7,500 patent applications in process. We have tremendous strength in wireless standards and non-essential patents to deliver competitive products. We believe we’ll be able to provide much better support to businesses at Motorola Mobility as well as support the Android ecosystem.
13.47
Google’s legal chief David Drummond is addressing a question on patents. We have been asyaing for sometime we intend to protect the Android ecosystem. It is under threat from some companies. I’m not prepared to talk about specific strategies but we think combining with Motorola and hacving that kind of patent portfolio to protect the ecosystem
13.43
Google says it retains “plenty of financial flexibility” even after this huge deal. It has made over 120 acquisitions over the last 10 years. It will run Motorola as a separate business with separate reporting when the deal closes.
13.39
Mr Page is paying tribute to Motorola’s long pedigree in the mobile business and its new management’s progress in using Android in the developing world. “Extremely important event in Google’s continuing evolution.”
“I’m impressed in the transformation that the team there has initiated,” he says, with a “strong vision” for the future. “I think there’s an opportunity to accelerate the home business,” he adds referring to IPTV and Google TV.
He also emphasises the “strong patent portfolio” that can help “protect Android from anticompetitive threats” from Apple, Microsoft and other companies.
13.36 Larry Page is first to speak.
The combination is going to drive tremendous shareholder value and innovation, he says.
“In May 2005 I met Andy Rubin for the first time. He had a crazy vision… for an open source platform to accelerate the pace of innovation in the [mobile] industry… That was just six years ago – Android is now one of the leading platforms in the industry.” Android launched in November 2007 and is now the leading smartphone operating system by devices sold.
