HTC Corp., Samsung Electronics Co. and a host of smaller handset makers are at risk of losing their cachet after Google Inc. buys Motorola Mobility Holdings Inc.
Google said Monday it will pay $12.5 billion for Motorola Mobility, purchasing more than 17,000 patents it can use to defend against allegations of infringement as competition accelerates in the $206.6 billion mobile-phone market.
The rival handset manufacturers, which have been building devices with Google’s Android software since 2008, may have a harder time cranking out best-selling devices because Motorola Mobility may get earlier access to the newest Android technology, said Michael Gartenberg, an analyst at research firm Gartner Inc. The acquisition gives Google an incentive to favor Motorola Mobility, and association with the Internet company will give Motorola handsets a leg up in competing for consumers.
“This is their nightmare scenario,” said Gartenberg, whose firm is based in Stamford, Conn. “Google has gone from partner to competitor.”
HTC chief financial officer Winston Yung said he supports the deal. Google also said the transaction is supported by Samsung, Sony Ericsson Mobile Communications AB and LG Electronics Inc.
“We’ve managed our ecosystem really well, and we’re going to continue to do that,” Google chief executive Larry Page said Monday. “They know we’re committed to them and we’re committed to making that whole ecosystem successful.”
Android partners are poised to benefit from the patent protection provided by the deal. HTC and other manufacturers are defending against suits that claim their phones infringe patents held by Apple Inc. and Microsoft Corp. Google will use the portfolio as leverage in negotiations over cross-licensing deals, said Abhey Lamba, an analyst at ISI Group in New York.
