From Anand Parthasarathy in Bangalore

Google has announced that it will acquire Motorola Mobility -- the cell phone business of America’s most sustained innovator in the mobile communications sector -- for $12.5 billion.  The real prize seems to be  Motorola's huge stash of patents and intellectual property -- created and consolidated  under the leadership of two Indians. Motorola has a long history of innovation – indeed, it was a brick-sized Motorola handset from which the world’s first cellular phone call from a portable phone was made in April 1973 on the streets of New York, by one the co-inventors, Dr Martin Cooper ( see our Image of the Day story “Long March of the mobile… is full circle for Motorola” http://www.indiatechonline.com/viewimage.php?id=274  ).
Since then, Motorola has accumulated a huge cache of 16,000-plus patents and it is industry perception that this is the real target of the acquisition, not Motorola’s handset line up. With this chunk of innovation and ideas, Google is better positioned to take on the iPhone and Windows-enabled phones both in the market place and in the law courts where this large players seem to spend so much of their time, suing each other.
Analyst Tim Renowden at Ovum seems to agree: “ This move brings Google significantly closer to Ovum’s hypothesis of a “managed device platform” where a vendor controls all aspects of a platform, including hardware, software, content and online services. …The acquisition will significantly strengthen Google’s patent portfolio, an important move in light of ongoing patent litigation across the mobile industry, particularly litigation aimed at Android and its vendor partners”. Adds Forbes: "Today’s deal is all about acquiring Motorola’s backlog of mobile-related patents". http://www.forbes.com/sites/ericjackson/2011/08/15/the-patent-arms-race-explodes-with-google-buy-of-motorola/  

Interestingly, this  huge pile  of patents and IP at Motorola, was created under the leadership of two Indians :

-  Padmasree Warrior, who joined Motorola in 1984, served the company for 23 years, in positions like Chief Technology Officer of the semiconductor division ( later hived off as Freescale); Motorola CTO from 2003 and Executive Vice President from 2005, till she left to become Cisco’s CTO in 2007. At one time, she presided over an R&D team of 25,000 world (including a substantial Indian team) and an annual budget touching $ 4 billion. She is credited with inspiring Motorola’s most iconic handset in recent years, the clamshell shaped flip-open phone, Razr.

- Sanjay Jha who took over as CEO of Motorola Inc in 2008, had a long innings at Qualcomm, from 1994 and ended up as President of that company’s CDMA Technologies business. In his relatively short Motorola stint, Jha presided over the separation of Motorola’s mobile business from its telecom core into Motorola Mobility and tried to revive and reposition its handset business. The Google deal he has worked, is said to be very good for Motorola Mobility shareholders – and is widely expected that he will move to Google and continue to guide mobile phone IP in the new R&D entity that will presumably be carved out.

In a broader sense, Google’s ownership of a respected handset brand and the acquisition of all this intellectual property, may be part of its vision of the future. “Computing is moving onto mobile,” Google CEO, Larry Page , is quoted saying in a New York Time story “Even if I have a computer next to me, I’ll still be on my mobile device.” The article goes on to say: With the Motorola deal, analysts said, Google may be able to accelerate innovation in smartphones and tablets. http://dealbook.nytimes.com/2011/08/15/googles-big-bet-on-the-mobile-future/ 

Aug 16 2011