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Google buys Motorola's mobile arm

Google is to purchase Motorola Mobility in a deal worth around $12.5 billion, giving the company its first own-brand smartphone entity and spelling an end to hardware partnerships for the Nexus range.

The move gives Google access to Motorola's not-inconsiderable Android smartphone expertise, and suggests that the company could be looking to get away from partnerships with companies like HTC and Samsung for its own-brand Nexus devices.

Motorola has been producing Android phones for some time, starting with the Droid - known as the Milestone in Europe - and most recently the Atrix, a hybrid device which comes with a screen and keyboard dock to turn it into an Android-powered netbook.

The company also produced the first tablet to run Android 3.0 Honeycomb, the Motorola Xoom, which was used in all of Google's demonstrations of the operating system.

Google has paid $40 per share in cash, representing a premium of 63 per cent over the closing price of Motorola Mobility at last trading. Since news of the acquisition broke, Motorola's stock has risen 60 per cent.

"This acquisition will not change our commitment to run Android as an open platform," Google chief executive Larry Page has claimed in a blog post. "Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.

"Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies," he added, making a clear reference to Samsung's recent legal problems and Motorola's own tussles.

The move puts an end to rumours that Motorola was looking for a Nokia-style deal with Microsoft to produce Windows Phone handsets, and suggests that any smartphones carrying the iconic 'wings' logo in the future will be Android only.