Google is buying Motorola Mobility for $12.5 billion in the largest acquisition ever for the tech company. Google has said the company is serious about expanding its business beyond Internet search and advertising and the purchase is a prime example, as the company charges ahead into mobile technology.
But there's a lot at stake with the acquisition, and everything may not be as easy as one plus one equals a billion dollar result. But nobody questions that Google is making a bold move, with much to win through the transaction.
Here's five things to know about Google's acquisition of Motorola Mobility:
1) Google is competitively going after Apple with this move.
Google's Android is the world's dominant smartphone operating system, but Apple's iPhone is easily the world's dominant smartphone. In other words, Google has found that as Apple piles up $76 billion in cash and counting by selling the iPhone and other products as fast as the company can have them made, it's also about the device.
So now Google will have a hardware platform, as well as patent protection for integral parts of its Android operating system. Now, Google can go directly after Apple with its Android operating system and signature hardware products.
2) Android will get a personality -- becoming a knight with armor.
To date, Android is a system that has millions of fans, but they experience Android through a variety of body styles.Consider that Android, to date, has been a knight without armor.
Now, Google will have a showcasing platform through Motorola Mobility for Android, and consumers can expect the company to exploit that relentlessly.
3) Smartphone pricing will get more competitive for consumers.
Consumers win big on this acquisition as long as Apple's iPhone pulls easily ahead with no single product as a rival -- the company could more easily hold on to higher pricing. Smartphones running on the Android system are already much less expensive across the board than Apple's iPhone, because there are so many competitive devices.
But none stand out from a signature product perspective the way Apple's iPhone does. If Google can effectively establish a rival smartphone signature product line through Motorola that consumers can directly compare with Apple's iPhone, well, pricing will come down. Fast.
4) Google is becoming tangible.
Google became an integral part of our lives through that signature bar of possibility that takes us where we want to go. To most of us, the only tangible thing about Google for many years has been what we derived from that possibility -- the results we parlayed into something we could hold.
But it's all changing now, as Google moves with consumers from a bar of possibility into a physical result the company designs and manufactures -- mobile communication devices. No longer a bar of possibility, Google has taken a step towards becoming something tangible.
All that remains to be seen is whether consumers like it or not.
5) Apple will be the next to make an acquisition.
Apple didn't hoard $76 billion for nothing, or CEO Steve Jobs isn't the genius everybody proclaims. He's made no secret that Apple has been hoarding cash for a reason -- to strike a buy at just the right time.
Google has been hoarding cash too, and now we see why. The company has made its move. But stay tuned, Apple's move is likely coming next.