Google set to buy Motorola mobiles to put bite on Apple

TECHNOLOGY giant Google has unveiled its biggest-ever deal which will see it take over Motorola’s mobile phone business for £7.7 billion and allow it to challenge arch-rival Apple’s dominance of the market.

The search engine group’s acquisition of Motorola Mobililty will give it direct control over one of the biggest manufacturers of phones using Android – Google’s own operating system.

The deal – which is expected to be completed early next year – represents Google’s biggest challenge yet to Apple, which has led the way in the smartphone and tablet markets with the huge growth of the iPhone and iPad.

Experts believe the deal will allow Google to mount a serious challenge to Apple in both the technology and hardware markets.

Motorola was once one of the world’s most successful mobile phone manufacturers, but has fallen behind the likes of Apple, Samsung and HTC in recent years. Many of its handsets already use Android.

Google will run Motorola Mobility as a separate business. Other mobile manufacturers, including Samsung and HTC, will be free to release phones using Google’s Android software.

Larry Page, Google’s chief executive, said the deal – which is subject to regulatory approval – would allow it to “supercharge” its Android operating system and extend the system into new areas other than smartphones.

Earlier this year, Motorola split into two separate companies. Motorola Mobility develops and manufactures mobile phones, while Motorola Solutions covers wider technologies for corporate customers and governments. The latter is not part of the deal unveiled yesterday.

Experts believe Google’s move marks a change of emphasis for the firm as the battle with Apple and Asian rivals intensifies in the booming smartphone and tablet market.

The tablet computer market is predicted to grow more than ten-fold by 2015, with devices running on Android tipped to match or even overtake the current market leader, Apple’s iPad.

Mr Page added: “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies.”

He said the deal would allow Google to “better protect” Android from “anti-competitive threats” over patents from Microsoft, Apple and other companies.

Sanjay Jha, chief executive of Motorola Mobility, added: “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world.

Apple is the biggest smartphone producer in the world, accounting for 18.5 per cent of all handsets shipped. However, Android has by far the biggest share of operating systems used in smartphones. Andy Rubin, senior vice president of mobile at Google, said: “We expect that this combination will enable us to break new ground for the Android ecosystem.”