Google's bold Motorola bet could reshape Asian phone makers (Reuters)

SEOUL (Reuters) ? Asian phone vendors betting on Android could increase their exposure to rival mobile operating platforms, threatened by Google's move to buy Android-backer Motorola Mobility Holdings to gain access to a large portfolio of patents.

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.

Google's acquisition history, click http://r.reuters.com/gaz23s

REUTERS INSIDER story, click http://link.reuters.com/muv23s

Samsung and Apple have been locked in an acrimonious battle over smartphones and tablets patents since April. A U.S. 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.

HTC IN FLUX

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 U.S. 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."

Shares in Samsung rose 3.9 percent and LG Electronics edged up 0.9 percent in a broader market up 3.9 percent in post-holiday trade on Tuesday. HTC was up 1.5 percent in a market up 0.2 percent.

"We suspect that Google will now try to provide an umbrella for the Android community that provides IP protection from key rivals such as Apple and Microsoft. This is broadly how Microsoft protects Windows Phone," Nomura said in a note.

"We do not believe that Google will aim to continue to make handsets long term, but will rather look to spin the business out to an Android partner - such as Huawei, LG, ZTE, for example."

The deal stoked immediate speculation that Nokia and Research in Motion -- struggling device makers in a mobile arena dominated by Apple -- would become takeover targets themselves, sending Nokia's shares up more than 17 percent and RIM's up more than 9 percent.

(Additional reporting by Faith Hung and Clare Jim in Taipei and Lee Chyen Yee in Hong Kong; Writing by Anshuman Daga)

Source: http://us.rd.yahoo.com/dailynews/rss/india/*http%3A//news.yahoo.com/s/nm/20110816/india_nm/india587962

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