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| Image by Aray Chen via Flickr |
The $12.5 billion acquisition of Motorola, the largest in Google's history, is expected to close early this year.
Motorola's weak results "may suggest further deterioration in the business since the acquisition was announced, and they highlight the uphill battle for Motorola" in the competitive smartphone market, JP Morgan analyst Doug Anmuth wrote in a note to investors on Sunday.
The weak financial results could also serve as a reminder to investors about the operational challenges that Google will face as it enters the hardware market, and of "clouded optics surrounding an overall slower growth, lower margin Google once the deal closes," Anmuth wrote.
Google, the world's dominant Internet search engine, has become the No. 1 provider of smartphone software with its freely distributed Android operating System used by handset vendors including Samsung, HTC and Motorola.
By acquiring Motorola, Google will be able to develop its own line of smartphones with tightly integrated hardware and software, as it competes against iPhone.


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