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You’ve likely heard by now that Google made a surprise bid today to acquire Motorola’s Mobility group for $12.5 billion in an all-cash deal — its largest to date.

There are lots of implications for this deal, and Moto’s patent portfolio alone (a key area of competition among mobile platforms lately) makes this a smart pickup for Google.

There’s also lots of speculation about what this will mean for the Android ecosystem, and competing hardware manufacturers that have built quite a bit of value around the platform (Samsung, HTC, etc.).

Google has claimed it will keep the platform open, though it’s now somewhat conflicted having an ODM horse in the race. But the benefits of keeping the Android ecosystem growing outweigh these conflicts; I believe Google when it says it will keep the platform open and agnostic.

It will also see advantages in having tighter integration between Android and the hardware that it will run on. Previously it was a bit of a disconnected value chain where ODMs will build devices around the platform in what is a bit of a hand-off of the technology.

Google’s efforts to directly build devices — first seen in the NexusOne and continuing with annual releases in the Nexus line — are one way it’s sought to tighten up that technology integration. The advantages are clear as the Nexus S is arguably the best Android device on the market.

So today’s move is Google’s next step in that direction of having a more elegant melding of hardware and software that are designed together from step one. It takes the place of having the two cobbled together with a custom Android build, after the fact, by a device manufacturer.

But this new direction might sound familiar and that’s because it’s Apple’s model. Though it has scalability disadvantages when compared with the open Android platform, there are clear quality advantages in designing and building mobile hardware and software under one roof.

In fact, it’s not just Google moving in this direction; you could argue that lots of mobile M&A activity has this common thread of hardware and software integration. There’s HP and Palm to point to, as well as the landmark partnership between Nokia and Microsoft.

So what all this comes down to is that the bar will be raised for Android-based devices, as this vertical integration should result in better-quality phones. And stepping ever closer to an Apple model means we could finally start to see a viable competitor for the iPhone.

That’s going to be good for Google, good for mobile users and good for competition in the marketplace. This will be a smart acquisition for Google, and we’ll have lots of time in the coming weeks and months to see what else it has up its sleeve.


Image credit: BGR

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