Google acquires Motorola mobility: ripple effects

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15 August 2011
Bart Narter
If anyone was in doubt about Google's seriousness about mobile, those thoughts can now be laid to rest. Their $12.5 billion bet on mobile is reflective of the fact that Google sees about one in four of its searches starting from mobile. They also announced an agreement with Citi, MasterCard, First Data and Sprint for a payments and marketing initiative. One of the key issues around NFC payments is controlling the secure element. Owning Motorola gives them control of the device. And remember that while Apple might be leading the smartphone market, it is nowhere near the largest device manufacturer for the US market as shown below. phone-share1 Source: comScore, Dec 2010 In the payments world this acquisition also gives Google the ability to place a secure element on the device which they control. A secure element is a place where sensitive information can be stored such as credit card numbers. If you don't have access to a secure element, you can't manage payments. One secure element sits in the SIM card issued by the mobile network operator (MNO). There has been speculation that Apple will put their own secure element on the phone itself. Would Google do the same? The ripple effects of this acquisition are only beginning to be contemplated. They will certainly reach the payments world.

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