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GOOGLE has agreed to acquire Motorola Mobility for about $US12.5 billion ($12bn), a deal that spells the end of independence for a venerable American company and reshapes the booming market for smartphones as computing shifts from the desktop to mobile devices.
The deal gives Google -- which has spurred widespread adoption of its Android mobile operating system by licensing it freely to mobile phone makers -- its own in-house hardware operation, potentially enabling it to challenge rival Apple on better terms but also raising questions for partners like Samsung Electronics, HTC Corp and LG Electronics.
It also gives Google ownership of a huge trove of patents that it will be able to use to defend itself amid an increasing fierce war over intellectual property among technology companies.
More fundamentally, however, the deal further hardens the battle lines in the mobile business. Apple already operates what some call a "walled garden" of operating software, mobile applications and devices like the iPhone and iPad.
Earlier this year, Microsoft cut an extensive deal with Nokia that will see the world's top mobile phone maker adopt its Windows mobile operating system for smartphones.
Now, Google too will be closely aligning hardware and software.
Google executives said on a conference call that the acquisition will help protect the Android operating system from patent threats. The company also offered assurance the deal won't affect its relationships with handset-making partners that use Android.
"With mobility continuing to take centre stage, the combination with Motorola Mobility is an extremely important event in Google's evolution," Google chief executive Larry Page said.
The deal gives Google -- which has spurred widespread adoption of its Android mobile operating system by licensing it freely to mobile phone makers -- its own in-house hardware operation, potentially enabling it to challenge rival Apple on better terms but also raising questions for partners like Samsung Electronics, HTC Corp and LG Electronics.
It also gives Google ownership of a huge trove of patents that it will be able to use to defend itself amid an increasing fierce war over intellectual property among technology companies.
More fundamentally, however, the deal further hardens the battle lines in the mobile business. Apple already operates what some call a "walled garden" of operating software, mobile applications and devices like the iPhone and iPad.
Earlier this year, Microsoft cut an extensive deal with Nokia that will see the world's top mobile phone maker adopt its Windows mobile operating system for smartphones.
Now, Google too will be closely aligning hardware and software.
Google executives said on a conference call that the acquisition will help protect the Android operating system from patent threats. The company also offered assurance the deal won't affect its relationships with handset-making partners that use Android.
"With mobility continuing to take centre stage, the combination with Motorola Mobility is an extremely important event in Google's evolution," Google chief executive Larry Page said.
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