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Google move 'could reshape Asia phone makers'

Singapore, August 16, 2011

Asian phone vendors relying on Google's Android operating system could increase their exposure to rival mobile platforms such as Microsoft's Windows, threatened by Google's $12.5 billion buy of Motorola Mobility Holdings.

Taiwan's HTC and Korea's Samsung Electronics  have sold millions of mobile devices running on the free Android device since 2008, helping power Google to the top slot in the booming global mobile software market.     

But the acquisition of Motorola will transform the mobile landscape and potentially turn Google from a partner to a competitor for more than 30 other handset companies that use Android.

'The deal will make most Android players realise how dependent they are on Google and how quickly Google's plans can change their businesses,' said Francisco Jeronimo, an analyst at research firm IDC.

'Samsung, HTC, and Sony Ericsson may now look at other platforms as a way to diversify the risk of being so dependent on one platform.'     

Wall Street quickly anointed Microsoft a winner in the deal, with Windows potentially benefiting if the acquisition alienates the other phone makers that rely on Android.

Samsung and Apple have been locked in an acrimonious battle over smartphones and tablets patents since April. A US trade agency is separately reviewing Apple patent-infringement complaint against HTC.

Samung and HTC officially said they welcomed a deal that might aid their own patent legal battles, but some analysts questioned the sincerity of those claims.

'The danger is that other handset makers feel disenfranchised,' said Nomura Securities global technology specialist Richard Windsor. 'Motorola is the weaker player. This could actually collapse the entire community.' 
Android held a 43.4 percent share of the smartphone market at the end of the second quarter, ahead of Nokia's 22 percent, as per Gartner data. Apple ranked third with 18 percent, the data showed.

China's Huawei Technologies, known for its low-cost cellphones, is looking to replicate its telecom gear success in the smartphone market as it takes on the likes of Nokia, Apple and Samsung.      

Rival ZTE Corp is also aggressively muscling in on mobile devices. Huawei and ZTE's smartphones mainly run on Android.

HTC has been a standout winner after being the first to roll out a Android-backed smartphone. Nearly all of its smartphones run on Android but it also has a long-standing partnership with Microsoft.

HTC said in May it plans to bring out phones based on Microsoft's new Mango Windows phone software. However on Tuesday, HTC said the Google-Motorola deal would not affect its partnership with the US company.

'This is a positive development to the Android ecosystem, which we believe is beneficial to HTC's promotion of Android phones,' HTC said in a statement. 'The partnership between HTC and Google remains strong and will not be affected by this acquisition.'  - Reuters

Tags: Google | Motorola | HTC | Andorid |

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