The transaction could give Motorola the edge against other handset manufacturers that use the Android operating system, such as HTC and Samsung, by allowing the company to produce a range of phones that are more succinct with Google’s software.
The acquisition, which will still see Motorola Mobility running as a separate business and licensee of Android, will provide the former company with “money can’t buy marketing”, according to the source.
They add: “This provides Motorola with the kind of advertising that would be difficult to pay for. This could potentially allow it to build something unique, that other companies couldn’t do, like a pure Google device.”
Google has already launched the Nexus range of own-brand smartphones, although this included devices built by HTC and Samsung rather than its in-house developers.
The Nexus range was met with a muted response by both carriers and consumers and has failed to take a considerable share of the global smartphone market.
Motorola will hope the Google deal will replicate its peak at the top of the mobile market it reached after the launch of the RAZR camera phone in 2004. Since then, Motorola been usurped in sales figures by Apple and Sony Ericsson, which produced more innovative products at a quicker rate.
Motorola was the eight-largest smartphone vendor in the world in the second quarter of 2011, according to IMS Research, and currently has just a 0.6% share of the UK smarphone market, according to comScore.
Sanjay Jha, CEO of Motorola Mobility, said in a statement: “Through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”
For Google, the acquisition marks its first significant move into the handset market, which it will be hoping will boost Android’s global market share dominance by creating an “ecosystem” to align Motorola’s devices with the operating system.
The deal also strengthens Google’s patent portfolio, which its CEO Larry Page says will enable the company to better protect itself from “anti-competitive” threats from Microsoft, Apple and other brands.
Details about how the acquisition will affect marketing or staffing at both companies are not thought to be revealed until global competition authorities have approved the transaction, which is expected to close by the end of 2011.