Google to Buy Motorola Mobility for $12.5 Billion

Looks like Larry Page didn't waste time since he moved to the CEO position. It is hard to believe that the acquisition was made for Motorola's hardware business. Google wouldn't risk alienating all the smart phone makers (Samsung, HTC) who are using the Android operating system. It seems to me that Google wanted to make sure that no patent lawsuit would stop Android's growth. I see a few dark clouds on the horizon for this acquisition:

• Looking at the problems AT&T is facing with the T-Mobile acquisition, I wouldn't be surprised to see the Feds looking at this transaction very closely and, despite approving other patent acquisitions, investigating the run for patents.
• Set top box, smart phone and tablet manufacturers may ask Google to reconsider the move or get guarantees from Google about the future of their relationships.
• Nearly 20,000 employees to integrate in a software, Silicon Valley culture-driven company. It will be a challenge for both sides to adjust to the new environment.

There is no doubt that there is a huge patent war going on between Google on one side and Apple and Microsoft on the other side. What will happen when they run out of patents to buy?

Disruption at work: Apple's iPad

Apple has done it again. The Cupertino guys have, one more time, dramatically changed how people consume digital content with their new iPad device. This is on the same scale as the iPod and iPhone introduction. Digital content streaming is going to explode with the adoption of the iPad. The size, the weight, the resolution and the price make it the perfect device to use in the house. I don't like to look too far back, but Apple is superbly executing on their strategy as discussed in an early 2006 post. So who should be concerned with the new iPad?

• Amazon. It's going to take a lot of work for the Kindle to get any significant traction unless there is a big change in design and business model.
  


• Carriers. AT&T gets a 3GSM model to increase its subscriber base in an environment where ARPU is declining. Verizon and Sprint must be worried and so should be other carriers worldwide.
  


• Print Media. It's going to be very interesting to watch how media companies such as newspapers are going to react to the new device. Why do you want to pay for print newspapers/magazines ever again? I'd better monitor newspapers sales and distribution from now on.
  


• Device manufacturers (Nokia, RIM, Samsung, LG). Apple is all over the house now, they have so many touch points with the consumer that the barriers to entry will be too high for you and you may become irrelevant quickly.
  


• Google. This is a double-edged sword. Apple was first to market but a lot of the device manufacturers may flock to Google to adopt Android. This looks very much like the open vs closed war that we saw before.

All these companies are vying for a dominant position around the network triangle. Apple and Google are appearing as the leaders to control the overall user experience.