Now that federal regulators appear poised to approve Google’s $12.5 billion purchase of Motorola Mobility, speculation is mounting about what the Internet giant will do with its newly acquired assets. And what assets they are. Once the deal is formally approved — an announcement could come next week, according to multiple reports — Google will be in possession of some 17,000 patents related to mobile phone technology. And it will be well-situated to enter the hardware business, which could mean that consumers will soon see Google-branded phones and home entertainment devices.
From the beginning, the deal was viewed a defensive play by Google, amid an escalating intellectual property arms-race being waged by some of technology’s biggest players, including Microsoft and Apple. Both of those companies are part of a consortium that has agreed to purchase some 6,000 patents from Nortel, a deal that is also expected to be approved.
“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” Google CEO Larry Page (pictured) said when the deal was announced.
But the real story here is that Google appears to be on the verge of entering the hardware market, a move that would represent a radical departure for a company that has built its fortune as a software business. According to The Wall Street Journal, Google is preparing to launch a home-entertainment system later this year bearing its own brand.
As the paper points out, Google’s new system — which could allow users to control their systems using a smartphone or tablet — would bring it even closer into combat with Apple, which is also working to improve on its Apple TV device for the digital living room. So far, both companies’ efforts in that space have fallen short, but expect the competition to heat up moving forward.