Does Google Motorola Deal Blow to Both Rivals and Android Partners?

Google lost the battle with Apple, Microsoft and other in the bid for Nortel Network's 6,000 patents in the extravagant $4.5 billion transaction. The search giant regained some traction with it $12.5 billion dollar acquisition of Motorola in its push for dominance in the mobile market. The purchase includes 17,000 patents that Google can utilize in combating legal affairs with rivals such as Apple.

Patents portfolios and the battle over them have intensified and Google looks to protect itself with its latest collection from Motorola.

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," wrote Google CEO Larry Page.

The competition between Apple and Google currently exists in devices, data and online services, and loyalty of customers. Google's Android goes toe to toe with Apple's iOS 5 in delivering apps, user experience, and cloud services. The devices range in smartphones and tablets, which Apple currently dominates with its iPhone and iPad lineup. Google Android devices have been rumored to knockout Apple in that area but appear to have fallen short each time.

One area Apple holds the advantage of overseeing the entire production from OS development, device manufacturing, and pricing. Google's acquisition of Motorola can place the company in a similar model to monitor its pipeline flow of Android OS and personalized company phone like the Nexus.

"Following its tentative Nexus Smartphone strategy, Google would now enter the handset business in a big way, pursuing tighter hardware/software integration -- which for Apple has been a key competitive advantage," said Mike Abramsky, an analyst at RBC Capital.

Android partnered companies such as HTC may see some support with Google's recent acquisition as Apple currently targeted HTC and Samsung for intellectual property and patent violations. As Google plunges deeper into the mobile device market, the acquisition of Motorola's patents provides a security blanket for Android and its partners.

"We welcome the news of today's acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem," wrote Peter Chou, Chief Executive of HTC.

Other partners may carry concern that its one time partner has partially transformed into a competitor.

"Google is saying this deal won't change their commitment to original equipment manufacturers (OEM), however this takeover may be significantly disruptive to the Android OEMs, who now -- depending on how Google handles it -- view Google as a competitor as well as partner," said Mike Abramsky, an analyst at RBC Capital.

Though Google and Motorola may deal some blows to Apple by offering higher end products to its customers, the damage may be spread out among Android's partners as well. Carriers and manufactures have been a huge part in Android's explosive growth but the landscape is not altered if Google enters the market of creating platforms and devices.

"Google is saying this deal won't change their commitment to original equipment manufacturers (OEM), however this takeover may be significantly disruptive to the Android OEMs, who now -- depending on how Google handles it -- view Google as a competitor as well as partner," said Abramsky.

Google weighs its risks and can utilize a company such as Motorola as an alternative if Samsung and HTC decide to go with another platform.

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