The Google Android apps now included on many of the world's leading brands of smartphones have become much more important with news yesterday the internet giant plans to buy Motorola Mobility.
In a joint statement, Google and Motorola said the boards of both companies had unanimously approved the deal which will see Google pay $US12.5 billion ($NZ15 billion) for Motorola Mobility.
Regulatory approval is needed for the deal to go through.
Motorola was split into two companies earlier this year.
Mobility develops and manufactures mobile phones while Motorola Solutions covers wider technologies for corporate customers and governments.
Google Android has been used increasingly by smartphone manufacturers as they try to counter Apple's iPhone developments.
Firms like Samsung and HTC have been quick to use Android but must be wondering how they now sit in importance when it comes to Android updates.
Wall Street was quick to acknowledge the strength of the deal with shares in Motorola Mobility jumping 56% to $US38.13 yesterday, still below the offer price of $US40 a share.
Shares in Google fell 1.8%.
Nokia shares listed in New York had jumped 17% by the end of trading on news of the deal with renewed speculation that the Finnish mobile phone company could become a bid target itself, with Microsoft a likely suitor.
Microsoft's Windows 7 application is used on some Nokia smartphones but could become an attractive alternative if companies other than Motorola get first use of Android updates.
The deal is Google's largest acquisition to date, according to reports.
Google executives said the acquisition was important for its intellectual property strategy as the company has been engaged in legal battles with Microsoft and Apple over patents.
In July, Microsoft and Apple joined with several other technology companies to pay $US4.5 billion for more than 6000 patents formerly owned by bankrupt Canadian telecommunications equipment maker Nortel, McClatchy-Tribune News Services reported.
The Nortel auction prompted activist investor Carl Icahn, who owns about 11% of Motorola Mobility, to publicly push the company to explore options for its portfolio of more than 17,000 granted patents and another 7500 pending.
"Our acquisition of Motorola will increase competition by strengthening Google's patent portfolio, which will enable us better to protect Android from anti-competitive threats from Microsoft, Apple and other companies," Google chief executive Larry Page wrote in his blog.
