The deal, which has been approved by the boards of both companies, will give Google its own hardware products and allow it to compete more closely with phone- and tablet-makers such as Apple (AAPL), Hewlett-Packard (HPQ) and the new alliance between Microsoft and Nokia.
It also gives Google access to thousands of patents held by Motorola, which pioneered the cellphone business. Analysts said that could help the Mountain View company stave off a barrage of patent claims levied by Apple, Microsoft and other rivals against Google’s Android operating system.
Motorola Mobility has a portfolio of more than 17,000 patents, according to Trip Chowdhry, a tech industry analyst with Global Equities Research, who said that should help Google defend itself and other makers of Android devices against a wide-ranging series of patent claims that have been levied by Apple, Microsoft and even Oracle (ORCL).
Experts say the mobile-computing industry has become a hotbed of patent lawsuits, as several large players have begun fighting for turf in a growing and highly profitable market. Owning a healthy portfolio of patents can be a strong defense against challenges, experts say, because it allows a company to tell its rivals: “If you sue me, I’ll sue you.”
Page acknowledged this strategy, saying: “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anticompetitive threats from Microsoft, Apple and other companies.”
But analyst Abramsky cautioned that most of Motorola’s patents involve wireless communications technology, while Apple has more patents for things like touchscreen capabilities and user interfaces.
“This may not necessarily mitigate some of the IP wars currently under way,” Abramsky wrote in a note to clients, in which he referred to the current intellectual-property battles. But he said the deal “positions Google to defend itself against more fundamental patent attacks and gives it more leverage in patent negotiations” with Apple, Microsoft and others.