Google Inc. boss Larry Page says his company has agreed to pay $12.5 billion for Motorola Mobility, mostly to gain control of patents that would help defend its Android smartphones from rival Apple and its iPhones.
From Wall St. to Silicon Valley, a lot of telecom-watchers are buying that line. "Google's primary objective is to acquire Motorola's sizeable patent portfolio," Raymond James & Assocs. analyst Todd Koffman told clients in a report today. Motorola's other businesses - its money-losing phone-making unit and its Horsham-based video-equipment arm -- might add "potentially valuable growth," but "Google's core interests lie outside equipment, and we expect the company may divest" both the phone manufacturing business and the Horsham video-equipment plant "within the next few years."
But some telecom-watchers say Google has a much deeper strategy in play -- and that Motorola's Horsham plant, which currently makes set-top cable TV boxes and cable-to-wireless video equipment for Comcast and other TV players, is at the heart, not the edge, of the $12.5 billion deal.