Google recently merged with Motorola. The buyout price was $12.5 Billion. News of the Google acquisition sent the stock price for Motorola (NYSE: MMI) soaring from $24.47 to $38.13 in mid August. With Google’s current operating system of Android Gingerbread operating most if not all of Motorola devices, Google will now directly compete with Apple. Both companies now manufacture hardware and develop operating systems in the smart phone market.
The smart phone market is a monster cash generating industry reaching into the hundreds of billions. Android is dominating the smart-phone market with a 48% share of the market and Apple comes in second with 19% market share. Meanwhile, RIM has a mere 11% and Microsoft (MSFT) is lagging with 1%. HTC hardware giant still controls a vast amount of the market cap at $33.88 Billion. Motorola Mobility is not the only stock that rose because of the merger with gives Google full right to their 17,500 patents. Nokia’s stock price rose 17% after the Google deal and RIMM increased 10%. This is because Google assigned a value of $700k per patent on smart phones.
Samsung is also hopping on the bandwagon by simultaneously developing and promoting its own operating system called Bada. Don’t count out Microsoft. They’re pushing their Windows Phone 7 against the likes of iOS and Android. The software giant has made a deal with Nokia to make phones for them. It’ll be interesting to see how that one turns out. The majority of sales may turn in favor slightly to one side or the other, but the vast majority of people who own a smart- phone have set the standard with the Android operating system. Apple will always be a contender in every type of computer related consumer electronic because they invented the technology. The friendly, easy-to-use interface of the iOS and the specialized apps designed exclusively for it will keep them a frontrunner forever. Google will now follow their lead and expand the multi-billion dollar operation.
It will be interesting to see what happens in the coming months as the different software and hardware manufacturers form mergers & acquisitions. Would it be too difficult to assume that Google or Apple or Samsung merges with a service provider such as Verizon or AT&T? Maybe Google will set out to capture a larger share and buy HTC. Nothing is certain except that the wireless industry is expanding like wildfire. Including one of the major players in the industry in your investment portfolio may prove to be a wise investment considering the amount of cash flow that they generate.
Author Bio: Tom writes about the latest merger & acquisition news and virtual data rooms.