Google's Move Into Hardware Gains Momentum

The European Commission signed off on the Google-Motorola deal, and analysts expect the U.S. Justice Department to clear the buyout soon.

The deal is noted for the influx of patents Motorola brings to its new partner, but the purchase will allow Google to begin manufacturing its own hardware as well, rattling both rivals and partners of the search engine giant.

Google insists it does not intend to favor Motorola or alter Android's open platform, but nonetheless, its partners are seeking to lessen their dependency on the Android platform.

Google's OS partners, like Samsung, LG, and HTC, are likely to intensify their search for alternative operating systems, as Google's alliance with Motorola threatens the Android market.

The Motorola acquisition moves Google closer to developing an integrated phone, putting it direct competition with Apple's iPhone and RIM's BlackBerry. The purchase also intensifies Google's rivalry with Apple, as its expansion into hardware production mirrors Apple's production strategy.

In addition to helping expand into hardware, the Motorola deal bolsters Google's patent portfolio, strengthening its arsenal in its tangle of legal battles against rivals like Apple.

U.S. and E.U. regulators scrutinized the merger amid concerns Google plans to exploit its newly acquired patents, but the European Commission's decision to approve the buyout signifies regulators' satisfaction with the results of their investigation.

The E.U. approved the deal only after warning Google against using its new patent arsenal to launch additional litigation.

Google stands to gain a share of the hardware market with its Motorola purchase, although it must contend with concern from its current hardware partners and an elevated rivalry with Apple.

But the move is not without its risks. Google may lose revenue and stakes in its battle against Apple if Android smartphone makers pull out, so the company may profit best if it can allay their concerns and reassert its alliances with them.