Implications of the Google-Lenovo deal for Motorola Mobility

Google's sale of Motorola Mobility to Lenovo will have many widespread consequences for the tech industry.

First of all, Google gained a lot from the deal. This includes not only the Motorola mobility patent portfolio, but also the profits from the successful Motorola phones that Google manufactured and sold in 2013.

Second of all, Lenovo's purchase will have implications for the smartphone market as a whole. As an already established player in China, Lenovo has the market know-how to succeed in the smartphone market, which makes it a credible threat to attack Apple and Samsung's stronghold on smartphone market share. In fact, according to CNN Money, Lenovo will soon be able to sell more than 100 million smartphones annually.

Third, since Google considers this a successful acquisition, this will embolden Google's future mergers and acquisitions, resulting in a bolder market strategy for the tech giant. We have already seen this come to fruition, with Google purchasing Nest for $3 billion.


Source: http://money.cnn.com/2014/01/29/technology/mobile/motorola-lenovo/

Why did Google sell Motorola Mobility?

Did Google fail?

This was the question on everyone's mind when Google announced its sale of Motorola Mobility to Lenovo in January 2014. Google entered and exited the hardware market in just a year and a half, with seemingly nothing to show for it.

However, as with everything related to the tech giant, there is more than meets the eye.

First, when selling Motorola Mobility, Google cleverly managed to maintain one of the most valuable pieces of the acquisition: Mobility's suite of mobile patents. An increased safety net from legal prosecution is a huge benefit for Google, especially considering how much the Android platform has been involved in intellectual property cases.

Second, through its acquisition of Motorola Mobility, Google gained a great deal of leverage over one of its biggest partners, Samsung, which it will maintain after the acquisition. According to Forbes Magazine, in 2011, Samsung began to exploit its relationship with Google for its own benefit. It introduced "TouchWiz", a custom Samsung skin that hid all of Google's role in the operating system. Then, it began modifying the software and switching in its own applications, resulting in poorer performance and even less recognizability for Android. The last straw was when Samsung began to develop "Tizen", its own OS to compete against Android. When Google then purchased Motorola Mobility, the tables turned and the power was back in Google's favor. Fear of domination by Google-produced mobile devices scared Samsung into signing a 10 year patent deal with Google, which will strengthen the Android platform rather than weaken it. Two days later, Google sold Mobility to Lenovo.

Source: http://www.forbes.com/sites/gordonkelly/2014/02/10/how-google-used-motorola-to-smack-down-samsung-twice/

Why did Google buy Motorola Mobility?

In 2011, Google announced that they were going to purchase Motorola Mobility, the cellphone division formerly owned by Motorola. This sparked conversation and controversy for multiple reasons. First of all, Apple's initial domination of the smartphone market brought them a great deal of profit. Was another tech giant about to do the same thing? Secondly, Google was already producing Android, the world's most popular smartphone operating system. Would this impact their relationships with Samsung, HTC and the numerous other manufacturers?

However, one main question remain unanswered: Google is a company built on the back of software and computing. Why would a company like this want to enter the hardware market, by buying Motorola Mobility?

Well, according to Wailin Wong of the Chicago Tribune, "the acquisition was important for its intellectual property strategy, as the company has been engaged in legal battles with Microsoft and Apple over patents." The answer seems clear now. Google purchased Motorola Mobility to gain access to their numerous mobile patents.

Source: http://www.chicagomag.com/Chicago-Magazine/The-312/August-2011/Why-Did-Google-Buy-Motorola-Mobility/

Week 2 Video: Smartphone Patent War

Introduction Video

Smartphone Patent War: Is this what patents are meant for?

In a market-based democracy, the government implements checks on the power of wealthy corporations to protect the common man. These checks include anti-trust laws, monopoly dissolution, and most importantly, intellectual property protection. However, in this day and age, IP protection is being wielded as a weapon by large multinational corporations to manipulate the market and grab a larger share. This is exactly the opposite reason for why patents are granted, and this system needs to change.

Some of the litigation put forth by Apple clearly exists only to kill competition and further sway the market in their favor. For example, according to the Wall Street Journal, "The technology giant has secured two key U.S. patents on slide-to-unlock—a technology that lets users wake a dormant phone with a finger-swipe across the screen. And it is wielding those patents like swords against rivals around the world. In recent months, Apple has sued HTC Corp. in Delaware and Germany over one of those patents and others. It has used the patents to fight back against suits Motorola Mobility Holdings Inc. filed against it in Miami and Germany. And it has invoked them in lawsuits against Samsung Electronics Co. in Australia, the Netherlands, and San Jose, Calif." This is definitely not what intellectual property protection was meant to protect, and as such, I think strict measures need to be put into place to ensure that IP protects the common man, rather than hurting him.

Smartphone patent wars: What's going on?

Over the course of the past few years, several multinational corporations have sued each other for intellectual property violations, through the process of patent litigation. Naturally, these corporations were suing because they wanted a larger market share and were willing to employ legal techniques to get it. The bulk of the litigation was regarding phone design and OS specifications. Since both Android phones and iPhone tend to look quite similar and have pretty similar operating systems, the areas of overlap are huge.

It all started in 2009, when Apple and Nokia became embroiled in a fierce legal debate. They both sued each other for multiple IP violations, and the war had begun. Over the course of the next 4 years, many smartphone manufacturers, including Microsoft, Samsung, HTC, Apple, and Nokia, were involved in the litigation, with the two major players being Samsung and Apple. The Samsung Galaxy was achieving record success and starting to majorly cut into the iPhone's market share, so the tension culminated in several court cases around the world, including one here in the US, regarding intellectual property violation. Apple and Samsung each won a few key cases around the world, so the battle continues.

Why IEOR 190G?

There are many reasons I wanted to take this class, not the least of which is my passion for technology and my interest in holding a patent of my own in the near future.

I believe knowledge of patents is not only interesting, but also extremely useful. In the past few months, I have been working on a product that I recently applied for a patent for. The process was pretty confusing, leading to my wanting to know more about how patents are granted and why some patent applications are rejected.

I hope to have these questions and many more answered through the course of this class. I look forward to what is to come, and I wish all who are reading this a great Spring semester.

All about me

Hello world!

My name is Akshay Jagadeesh, and I'm a second year Computer Science and Applied Maths double major. I was born and raised right here in the Bay Area, so I've been indoctrinated into the culture of the Silicon Valley--there's nothing that gets me riled up like fusion cuisine and tech talks!

In my free time, I enjoy meditating, spending time in nature, and making fun of my friends. But don't worry, I'm not as perfect as I seem ;).  Like most other college students, I love eating, watching TV, and sleeping, so you can imagine how I spend most of my vacations.

I'm looking forward to this semester, and I'm excited to learn a ton about how awesome patents are!

Regards,
Akshay