Google is now Mobile handset maker

The 64th Independence Day of India also will be considered a red-letter day in the history of Google though for a different reason. Google announced that it bought Motorola's mobile phone unit for $12.5B in cash [Read the report at Techcrunch] With this, Google is making direct foray in mobile handset market which means they will now compete with Apple, Nokia and RIM for supremacy of this market. Mobile Handset particularly smartphone market is a big market as is evident from Gartner's latest news report.

The same report [see the table] also says that Android has moved up to become the top Mobile OS as was predicted in an earlier post. 

Incidentally Larry Page said two things : 1. This will help Google to protect and advance Android and 2. Android will continue to remain "Open". It probably will remain open for some more time, since openness actually benefits Google in the long run and secondly Google is not going to make the same mistake that Sun did with Java.
Forbes' blog argues that Google bought it because of Motorola's 14600 patents and another 6000 pending patents in the related industry and will help Google to fight lawsuits from Apple and others in future. From that perspective, this looks more like Google's corrective move after they failed to acquire Nortel's patents earlier this year. Their $900M bid failed when NORTEL board decided to sell the full company to Google's competition [consortium Microsoft, Apple, RIM, Sony, EMC] at $4.5B. How this will change the future of mobile handset market in north america, though is a very interesting question, is more an area of speculative expet opinions and better to be left for the experts. Significance of this announcement, however is both in future and in the past.
1. It marks the end of an era, an era of domination of North American telecom players. Nortel and Motorola are both history now.
2. Since this will deplete Google's cash reserve significantly, this also means that Google will direct all its salvos to get the full ROI of this acquisition. In other words Mobile Handset ecosystem is going to become Google's one of the primary business focus in a very near future. In fact if one considers another less advertised purchase, the announcement of Google buying Admob for $750M, it becomes quite apparent that Google is very serious about winning the last frontier of internet advertising i.e. mobile internet. Having the depth of handset technology from Motorola, reach of Android OS and Google's supreme leadership in internet-search and advertising, Google hass got all its cards laid out. To be seen is how Google deals with the sticky privacy issue that keeps coming up in the context of Android and consumer location tracking. However, given the huge potential the mobile internet market has, it is only predicatble that this market will continue to shape Google's future strategy in a big way. It would be interesting to watch how Apple and Microsoft answer to this challenge.