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Motorola posted heavy losses due to merger costs and lagging sales, and anticipates changes in strategy once Google's buyout of the company completes. Motorola's smartphone sales raised revenue this past quarter, but not enough to compensate for the overhead associated with its upcoming partnership with Google. Google bid on Motorola to establish its own line of mobile hardware, and based on the strength of its patent portfolio. Both Google and Motorola stand to benefit from its acquisition, but these assets will come with some challenges. As both companies gear up for the merger, expected to complete in early 2012, Motorola will likely intensify competition with Samsung's Galaxy smartphones and other Android makers since the handset maker plans to develop hardware exclusively tailored for Google. This may help Motorola devices gain an edge against other Android handset makers like HTC and Samsung, which current dominate Android sales. Motorola also intends to push fewer phones, placing emphasis on quality instead of quantity, a move set to distinguish the company from its competition. Motorola and Google's partnership will also affect the ongoing patent brawl between Android OS and Apple. Although Motorola will operate as a separate entity after the acquisition, Google will sign off on any major decisions, including litigation. Motorola recently filed a patent-infringement suit against Apple, marking the first time Google will directly face the Cupertino, Calif.-based giant in litigation. Apple is waging what many call a proxy war against Android by suing Samsung and HTC in a web of litigation around the globe. A string of patent victories in the U.S. and Europe bolsters Motorola's case. Once Google officially gains control over Motorola's expansive roster of patents, it will gain considerable ammunition against Apple in these court fights. Google's buyout means that Motorola is likely to regain traction in the handset market, and its patents will help spur future patent litigation. In this way, Motorola could emerge as a key player in Android's viability and play a main role in how the OS survives future patent battles.
Motorola Preps for Google Sale Amid Losses originally appeared at Mobiledia on Fri Jan 27, 2012 2:13 pm.
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