Google announced its intent this week to acquire Motorola Mobility, despite that company's continued failure to gain global market share. Google will pay $12.5 billion for the acquisition, a 60 percent premium on Motorola's stock price.

Google will take ownership of both the software and hardware units of the company. Over 150 million Motorola Android devices have been activated worldwide through a network of 39 manufacturers and 231 carriers in 123 countries. The popularity of the "Droid," as it is commonly called, is the most compelling reason for Google's acquisition of Motorola.

Along with the hardware and software, Google will also acquire Motorola Mobility's 17,000 patents and an additional 7,500 patent applications, making Google more competitive against Apple, Microsoft and Nokia.

Google is a member of the Open Handset Alliance, a group of 84 technology and mobile companies formed four years ago in order for members to "come together to accelerate innovation in mobile and offer consumers a richer, less expensive, and better mobile experience." Larry Page, chief executive of Google, has reaffirmed Google's commitment to the Alliance.

Some analysts believe, however, that Google wants to integrate the software and hardware businesses so it can have greater control over versions of the Android system currently, which currently vary by device. This would allow it to operate with a similar degree of control to what Apple maintains over the iPhone. The threat of competition from Google's Android may cause Samsung and HTC to proceed with caution.

Android partners in India are not concerned about the merger. Android is second in market share in India only to Nokia, with 33 percent. Samsung and HTC share most of the Android space in India, whereas Motorola accounts for only a small percentage of that market.

Source: Business Standard, "Motorola buy may not hurt Android partners in India," Leslie D`Monte, Aug. 16, 2011