Research in Motion, Nokia and the cable television business are emerging as potential winners after Google said it would buy Motorola Mobility for $12.5 billion.
If other handset manufacturers shy away from Google’s Android system, Nokia and RIM could stand to benefit.
Pay TV companies could also be boosted if Google, which would own Motorola’s set-top box business, backs down on disrupting the cable industry.
Meanwhile, the deal is unlikely to have an impact on Apple Inc’s quest for the hearts and minds of smartphone customers, analysts said. Now that Google is a direct competitor, Apple may drop some Google products in its devices.
Google’s bid hurt InterDigital shares on Monday as it appeared that Google would no longer be interested in buying the company’s wireless patents.
On Microsoft Corp, which has been touting its Windows software as an alternative to the operating systems of Android and Apple, views are mixed as to the deal’s effects.
MICROSOFT
Android handset makers may be more willing to take a gamble on the unpopular Windows phone as an alternative, but customers show few signs of interest in Microsoft’s belated attempts to find a foothold in the smartphone market.
But the deal brings Microsoft directly into legal conflict with Google over Android patents, which may hamper its attempts to collect royalty payments from Android handset makers. Microsoft and Motorola are already involved in a number of claims on each others’ technology. Google’s move to throw its weight behind Motorola will make for a tougher court battle for the software giant.
Microsoft might also be pressured into finding deals of its own to help spread its Windows phone software, said Al Hilwa, program director at IDC.
“It might send Microsoft into acquisition mode potentially looking at players like HTC,” Hilwa said.
NOKIA
Nokia shares listed in the United States rose more than 17 percent on Monday as Google’s offer for Motorola rekindled speculation of a bid for the Finnish mobile phone company. Nokia did not comment on the buyout rumors.
Nokia decided earlier this year to go with Microsoft’s Windows operating system instead of its MeeGo software, which is being phased out. Nokia is pinning its turnaround hopes on new Windows-based phones due later this year.
RESEARCH IN MOTION
BlackBerry maker Research In Motion is losing its once firm grip on corporate communication to devices like Apple’s iPhone and iPad, and to a lesser extent to Android-based devices.
Research in Motion’s shares have sunk almost 60 percent this year as the Canadian company missed its own earnings forecasts, delayed a line of phones and failed to excite with its PlayBook tablet.
Next year, RIM plans to move its BlackBerry smartphones onto the same QNX-based platform that runs the PlayBook.
An ever tighter integration between Google’s Android software and Motorola’s hardware “may put additional pressure on the success of RIM’s pending QNX Super phones strategy,” RBC Capital Markets analyst Mike Abramsky wrote.
RIM’s stock rose 3.7 percent after the Google-Motorola news, but its shares still trade at less than five times the average earnings expectation for the year to next February.
APPLE
Analysts said the deal does little to change the mobile landscape for Apple. Although Google’s Android through a variety of manufacturers is outselling Apple’s iPhone, Google is not seen as bringing any special handset expertise and so cannot enhance Motorola’s design or manufacturing.
“Obviously Motorola knows a lot more about handsets than Google,” said Gleacher & Co analyst Brian Marshall. “So I don’t see really what Google brings to the equation.”
The most obvious impact will be on the multiple patent infringement lawsuits that Apple has against Android handset makers around the world. But that too is unclear. Apple was also already suing Motorola Mobility for patent infringement.
One immediate response from Apple could be that it may drop some Google products, such as Maps or Search, from future versions of its iPhone and iPad.
CABLE INDUSTRY
Google has long been seen as a threat to the traditional pay TV industry, first with YouTube and then with Google TV box. Neither has quite had the negative impact on the cable business that some had predicted.
With this deal, Google is set to become one of the pay-TV industry’s largest suppliers. Even if physical set-top boxes go the way of the Walkman, Motorola’s encryption and conditional access software will continue to be important.
Bernstein Research analyst Craig Moffett wondered if owning a key supplier to the cable industry will temper Google’s enthusiasm for frightening those companies.
“I think the cable industry would be delighted to see Google inside the tent, so to speak, of the traditional Pay TV model,” said Moffett.
INTERDIGITAL
Shares of InterDigital Inc plunged 14 percent on Monday after Google’s bid for Motorola sparked worries that the search giant may no longer be interested in the company’s wireless patent.
In July, InterDigital said it was looking at a possible sale of the company and the Wall Street Journal later reported that Google might be in the race for its patents. Analysts, however, said the possibility of Google still being interested in InterDigital cannot be ruled out.
{Yahoo Finance/Matzav.com Newscenter}
