Google Inc. said yesterday that it will pay $12.5 billion for cellphone makerMotorola Mobility Holdings Inc., the biggest acquisition in the Internet search giant’s history and one designed to make it a more formidable competitor toApple Inc. and its iPhone.
The result, said Google’s chief executive, Larry Page, will be more and better smartphones for consumers. Google, which produces the popular Android software for smartphones and tablet computers, will be able to make its own hardware once it owns Motorola, which manufactures Droid smartphones and the Xoom tablet computer.“Together, we will create amazing user experiences,’’ Page wrote on the company blog.
The acquisition has a strategic goal, as well: to protect Google and its Android software for smartphones and tablets against a host of costly patent lawsuits filed by its rivals. Motorola holds thousands of patents, which now will be owned by Google, giving the search giant a stronger hand in court. Android products are “under threat from some companies who are looking to use patents to compete,’’ said David Drummond, Google’s chief legal officer.
Google expects the deal to be finalized by the end of 2011 or early 2012, after review by antitrust regulators in the United States, the European Union, and other countries.
Motorola Inc., founded in 1928 in Chicago, developed the world’s first commercial cellphone service in 1983. Motorola Mobility, its mobile phone operation, was spun off as a separate company in January.
Android began as the product of a Silicon Valley start-up company with a software development facility in Cambridge. The company was purchased by Google in 2005, and the software has become the world’s most popular platform for mobile devices like smartphones and tablets. Every major US carrier and 231 wireless providers around the world sell Android devices.
As a result, sales of Android devices far outstrip those for the iPhone and iPad, which run Apple’s iOS software.
Page said yesterday that more than 150 million Android-based phones and tablets have been activated, with 550,000 coming online every day.
The research firm Gartner Inc. estimates Android has 38.5 percent of the worldwide market for mobile device software, compared to 19.4 percent for Apple’s iOS, and by next year Android’s market share will reach nearly 50 percent.
For Google, the biggest advantage of the deal may be getting Motorola’s portfolio of technology patents. Google has been under intense attack by competitors who claim Android violates some of their key patents. Last week, a German court ordered Samsung Group of South Korea to stop selling Android-based Galaxy Tab tablet computers in most of the European Union, after Apple said the Google software infringed on some of its patents.
Other lawsuits against Android, including one filed last year by the giant database company Oracle Corp., are pending. One small Boston company, Skyhook Inc., has filed suit, saying that Android’s navigation technology infringes on several of its patents.
