Every so often, you see that X company acquired Y company for hundreds of millions of dollars. Every so often, you’ll see that number climb into the billions.
Last week we saw LinkedIn get snatched up by Microsoft for some $26.2 billion. Does Microsoft want a social networking platform for blue collar types that badly? We know that there have to be sensical synergies for the deal to happen, but come on! $26.2 billion? What kind of returns are these companies expecting and when do they expect them?
Well, we decided to take a look at five major acquisitions in technology with major impacts on mobile hardware and software. We have excluded mergers — sorry, HP and Compaq — and no network acquisitions — especially considering Verizon’s takeover of … Verizon Wireless for $130 billion (to be fair, it was Vodafone’s 45 percent stake in the venture).
Still, we know of a place to start.
$7.4 billion – 2009
We in the mobile tech industry may recall the largest repercussion of Oracle’s buyout of Java-maker Sun as the patent case that could’ve collapsed Android.
And yet, the courts have relented twice on Google’s part, ruling that the company partook in fair use of intellectual property. Icing Oracle further, we also learned that corporate considered but then decided against producing its own mobile operating system for “lack of expertise.”
Another appeals process is now underway.
$7.8 billion – 2014
Pocketnow covered how this acquisition started, how it fell apart and we’re now focused on how it’s ending. And yes, we’ve given our thoughts about how each and every step along the way was either right or wrong.
But to put it all in short form, Microsoft bought out Nokia’s mobile hardware division in the quest to have its own mobile hardware division to propagate its Windows Phone platform as it saw fit. Nokia needed an alternative to Apple and wanted a differentiation from Android in order to survive. But Windows Phone just wasn’t the platform for consumers. The deal was essentially written off only a year after it closed. Anything existing as a dedicated mobile vestige of Microsoft’s is rumored to be consolidated into general device services and sales.
The rest of Nokia is planning on entering the smartphone market in the near future with Android smartphones.
$12.5 billion – 2012
We could argue that this acquisition had the biggest impact in keeping a storied brand in mobility visible. At the outset, Google was said to be interested in Motorola’s 17,000 patents and its major skunk works like what would end up becoming Project Ara.
With Google holding the reins over Android, though, it couldn’t help itself creating a smartphone a refreshing hardware experience with down-to-earth touches in software. The Moto X exchanged the gothamic tack of what the Chicago-based manufacturer projected for a brand that was more colorful, friendly and human.
We’ve seen some shifts in philosophy with the transfer of the baton from Google to Lenovo (a deal that went for just under $3 billion in 2014, by the way), but while the Moto phones have become more like machines than partners, the brand has been kept alive long enough to encompass a larger company’s consumer-facing mobile brand.
In the meantime, Google is still trying to figure out which verticals it can boldly go its own on. In terms of smartphones, it seems that it simply can’t run with a manufacturing operation while carrying the software bag without ruffling feathers.
Google by the way, only left with some of Motorola’s patents. Lenovo kept the rest.
$19 billion – 2014
It doesn’t seem fair to call WhatsApp “the iMessage of every other mobile platform,” but the enhanced messaging app does cross most every one of them. So, why did Facebook make the bet when it already has a fairly well fleshed-out Messenger?
It seems so far to be a data pile for Facebook to aggregate, albeit a data pile all verified by phone numbers. We still don’t know how the company will serve WhatsApp’s billion-plus audience with that intel. The service has dropped its $0.99 annual fee to gobble up more users while gaining end-to-end encryption on all communications. Facebook Messenger, meanwhile, got many of the same features plus some of lighter fare like the “M” assistant and bunches of emoji and stickers.
Both are free services, but Facebook’s making money from all of them by mining users’ data and selling it to advertisers and content distributors. To safely say that you have “billions” of users to serve is to have business salivating.
$37 billion – May 2015
Odds are that you didn’t hear nor care much about this one. According to Bloomberg, though, this acquisition was the biggest in all of the technology sector at the time … before Dell bought out EMC for $67 billion in October, but that’s not our sort of cash cow.
If you have a phone connected to a Wi-Fi network, there’s a good chance the chipset that made it possible came from Broadcom — if you have an iPhone, it’s even more likely. The company makes more of those chips than any other out there.
Avago previously spread its own chipmaking out to smartphone OEMs, automakers and defense contractors. Getting a share of that lucrative Apple pie seems like a valid enough motive. While you may question where device sales are going for Infinite Loop off this recent quarter, many analysts still paint a rosy picture of what’s to come.
One challenge for the new Broadcom is treading through Apple’s diversification tendencies. Having parts orders given to a competing company during any given year definitely puts a crimp on the bottom line, but there have been cases where it just hasn’t worked out for Apple.
Time — and the numbers — will tell how well this coupling does.
What do you think?
The market is full of opportunities, but cliches don’t hold very well to what goes on for the future — whether or not certain combinations implode or rocket based on internal and external factors. Do you think, with or without hindsight, these deals were worth the handshake at the time? How about even now? Have we missed anything you think we should’ve included? Maybe our basis was a little off?
Tell us what your thoughts are in the comments.