Google Motorola Takeover
Business Economics Report | 5
2 Essay – Microeconomics
Evaluate the decision by Google to buy Motorola. What economic concepts would support this investment and in your opinion why might the purchase of Motorola be anti-competitive? “We are on a turning-point in the world of personal technology. For around 30 years PCs in various forms have been people’s main computing devices. Now the rise of smartphones and tablet computers threatens to erode the PC’s dominance, prompting talk that a “post-PC” era is finally dawning.” (Miles, 2011) On August 15 Google announced a $12.5bn deal to acquire Motorola Mobility. Until then, Google was known for its search engine and AndroidTM Operating System (OS). It had always avoided involvements in the hardware market in the past (Halliday, 2011). So therefore this was a quit exceptional deal and also Google‘s biggest acquisition so far. This deal will allow Google to step into the market of making both smartphones and tablets, a new, big step in the gadget-market1. Where it avoided involvement in the hardware market in the past, it is now turning itself into one of the main competitors for RIM‘s Blackberry and Apples iPhone. In acquiring Motorola Mobility Google will pit itself against manufacturing giant Nokia wit hits strategic partner Microsoft. But does this deal supercharge Google and its AndroidTM ecosystem? This essay will attempt to evaluate Google‘s decision by looking at the underlying economic concepts and will draw up an opinion on whether the purchase is anti-competitive or not.
The rise in the availability of network connectivity, online services and social networking has shifted the focus in the Technology Industry from corporate customers to consumers. By blurring the line between working and personal life a new tech landscape is shaped that offers consumers access to computing almost anywhere. Smartphones are at the forefront of this change. A shift in a more consumer way of developing technology, where
2 Essay – Microeconomics
Evaluate the decision by Google to buy Motorola. What economic concepts would support this investment and in your opinion why might the purchase of Motorola be anti-competitive? “We are on a turning-point in the world of personal technology. For around 30 years PCs in various forms have been people’s main computing devices. Now the rise of smartphones and tablet computers threatens to erode the PC’s dominance, prompting talk that a “post-PC” era is finally dawning.” (Miles, 2011) On August 15 Google announced a $12.5bn deal to acquire Motorola Mobility. Until then, Google was known for its search engine and AndroidTM Operating System (OS). It had always avoided involvements in the hardware market in the past (Halliday, 2011). So therefore this was a quit exceptional deal and also Google‘s biggest acquisition so far. This deal will allow Google to step into the market of making both smartphones and tablets, a new, big step in the gadget-market1. Where it avoided involvement in the hardware market in the past, it is now turning itself into one of the main competitors for RIM‘s Blackberry and Apples iPhone. In acquiring Motorola Mobility Google will pit itself against manufacturing giant Nokia wit hits strategic partner Microsoft. But does this deal supercharge Google and its AndroidTM ecosystem? This essay will attempt to evaluate Google‘s decision by looking at the underlying economic concepts and will draw up an opinion on whether the purchase is anti-competitive or not.
The rise in the availability of network connectivity, online services and social networking has shifted the focus in the Technology Industry from corporate customers to consumers. By blurring the line between working and personal life a new tech landscape is shaped that offers consumers access to computing almost anywhere. Smartphones are at the forefront of this change. A shift in a more consumer way of developing technology, where
References: Begg, D. and Ward, D., 2009. Economics for Business. 3th ed. Maidenhead: McGraw – Hill Education Limited, p. 155 Giles, M. (2011). Beyond the PC. The Economist [online] 8 October. Available at : < http://www.economist.com/node/21531109> [Accessed 2 December 2011]. Garside, J. (2011). Google 's Motorola deal is a gamble. The Guardian [online] 16 August Available at : [Accessed 2 December 2011]. Halliday, J. (2011). Google looks to 'supercharge ' Android with Motorola Mobility. The Guardian [online] 15 August. Available at : [Accessed 12 November 2011]. Merced, M.J. de la (2011). In the World of Wireless, It’s All About Patents. The New York Times [online] 15 August Available at : < http://dealbook.nytimes.com/2011/08/15/in-the-world-of-wireless-itsall-about-patents/> [Accessed 5 December 2011]. Rusli, E.M. (2011). Google’s Big Bet on the Mobile Future. The New York Times [online] 15 August Available at : < http://dealbook.nytimes.com/2011/08/15/googles-big-bet-on-themobile-future/> [Accessed 2 December 2011]. Websites Wikipedia, 2011. Consumerization [online] Available at : < http://en.wikipedia.org/wiki/Consumerization > [Accessed 5 December 2011] Gartner, 2011. Gartner Says Sales of Mobile Devices Grew 5.6 Percent in Third Quarter of 2011; Smartphone Sales Increased 42 Percent. 15 November Available at : < http://www.gartner.com/it/page.jsp?id=1848514> [Accessed 5 December 2011] Images Business Economics Report | 9 [20111008_SRM111.gif] n.d. [image online] Available at : < http://www.economist.com/node/21531109> [Accessed 2 December 2011]. [Porters five forces.png] n.d. [image online] Available at : [Accessed 5 December 2011].