Industry analysts said the Google-Motorola deal would not affect the smartphone market in China. Photo: CFP
Internet giant Google’s acquisition of US phone maker Motorola Mobility wouldn’t shake the existing smartphone market in China in the short term, market analysts said Tuesday.
Google Inc inked a $12.5 billion deal to buy Motorola’s cellphone business. A joint statement released Monday said the boards of both companies had unanimously approved the deal, which should be completed by the end of this year, or in early 2012.
The deal could offer Google an arsenal of patents for its legal battle with Apple Inc and others, and make it look better, Liu Guanwu, an analyst with Internet consulting firm Analysys International, told the Global Times.
The Motorola deal will reportedly provide Google with more than 17,000 patents to defend itself against a rash of lawsuits related to its Android software — which powers more than 150 million devices worldwide, including Motorola’s line of Droid smartphones.
As Google is best known for its software and Internet services, and Motorola possess assets in human resources and sales channel of hardware, the acquisition will help boost Motorola’s business, though it will take time to establish synergy, Zhang Yanan, an analyst with Zero2IPO, a consulting firm, told the Global Times.
“Google’s acquisition of Motorola has limited effect on the current market competition in China,” Liu said.
Motorola’s smartphones ranked No.3 with 12.9 percent market share in the first quarter, after Nokia’s 22.4 percent and Samsung’s 18.1 percent. All of the three top smartphone brands saw their market shares decline from last year, while Apple’s iPhone gained a market share of 8.4 percent in the first quarter compared with 5.4 percent during the same period last year, according to Analysys International’s latest report.
Google Chief Executive Larry Page said the company will continue to promote its software to phone makers that compete with Motorola. “The strength of Android has been its diversity, and we have 39 handset makers” that use the software, he was quoted as saying by the Wall Street Journal.
Unlike Apple Inc’s iOS, which is designed only for Apple’s products including iPhone and iPad, Google’s Android is an open sourced system to smartphone makers.
However, the market reckoned that the deal is suspected to bring Motorola advantages over the rest of the smartphone makers including HTC Corp, Samsung Electronics and Sony Ericsson that use Google’s Android system.
If this tie-up irks manufacturers, companies might shy away from the Android system and turn to Microsoft WP7, Fang Li, another analyst at Analysys International, wrote in a report.
“Some smartphone producers such as HTC and Samsung could adopt dual systems using both Android and WP7, leaving room for WP7 to grow,” Fang said.