So what's it mean for the rest of the industry? Typically, industry consolidation begets more consolidation. CNET offers five predictions for how this mega-merger may affect other players in the mobile market from highlighting the potential alliances that might form to the companies that may be possible acquisition targets.
1. Microsoft keeps close partnership with Nokia but adds closer ties to Asian handset makers: Samsung, HTC, and LG Electronics
Since Google's plan to buy Motorola was announced, pundits have been speculating on what Microsoft's next move might be. As a sort of knee-jerk reaction, people have wondered if Microsoft might take its relationship with Nokia to the next level.
It is certainly possible that this could happen. After all, not many people expected Google to buy Motorola just a couple of days ago. But most Microsoft watchers are skeptical that Microsoft would actually buy Nokia outright.
But that's unlikely because Microsoft already tightly controls the specifications for the devices on which its Windows Phone software operates. So Microsoft already ensures a more consistent look and feel to the user experience on Windows Phone devices.
The main reason that Google is buying Motorola is for its 24,500 patents. Microsoft may also want to own Nokia's mobile phone patents to bulk up its war chest of patents. But again this isn't necessary, given that the two company's have cross-licensing arrangements already.
And finally, Microsoft may have a disincentive to buy Nokia because it may want to cozy up with some of Googe's tight Android partners, such as Samsung, LG Electronics and HTC. These companies, which have been relying on Android, may now feel threatened and may be looking to diversify their product lines to ensure they aren't too dependent on Google.
2. Amazon and Hewlett-Packard team up via WebOS
Google, Apple, and Amazon have increasingly become competitors in the wider online world. Each of these companies now offers cloud-based content, and they're vying for consumer loyalty to their services. Devices such as Apple's iPhone and iPad and Google's Android devices provide that link to the cloud the services. And as portable devices, such as smartphones and tablets replace desktop and laptop computers, the battle for consumers hearts and minds will be fought in the mobile market.
While Amazon and Google are rivals when it comes to cloud services, they are also budding partners. Amazon is rumored to be developing tablets using the Google Android platform. But Google's purchase of Motorola may threaten this relationship with Amazon. And as a result, force Amazon to look for an alternative to Android.
Hewlett-Packard could be the perfect partner, according to ZDNet blogger Jason Perlow. HP, which bought Palm for its WebOS mobile operating system, hasn't seen much success with its first tablet, the TouchPad. But the WebOS software has actually won a lot of praise from experts. Perlow thinks that HP should cut a deal with Amazon.
He said that HP could continue to advance the WebOS technology, while leveraging Amazon's sales and distribution network for the tablets and phones that use the operating system. But more importantly, Amazon could provide the cloud services and content for the WebOS devices, including books, video, music, storage, and e-books. Currently, one of WebOS's biggest problems is that it doesn't have any content relative to Apple and Google.
On the hardware side, Amazon already has lots of experience partnering with Asian device makers for its Kindle e-readers.
Amazon could serve as the primary brand for the WebOS devices, giving HP much-needed marketing and distribution for its products. It could be a win-win for each company. But Perlow points out that this also means that Amazon would have to abandon or curtail its existing strategy for its Amazon Appstore for Android and its plans to build Android tablets.
3. Research In Motion becomes an attractive acquisition target, but who's buying?
Once worth $83 billion at its peak, RIM has lost about 80 percent of its value over the past three years as Apple and Google have eaten into its smartphone business. The company has fallen from the No. 2 position in terms of smartphone operating systems worldwide to the No. 4 spot as of the second quarter of 2011.
The company has plans to release seven new BlackBerry 7 handsets starting this summer, which may offer a slight boost to sales in the ultra competitive smartphone market. But the turn-around is likely to be a long one for the company, which is struggling to regain its footing.
Still, RIM owns some 10,000 to 15,000 patents that cover advanced wireless technology, security, enterprise mobility, and software. And of these patents more than 3,000 are specific to mobile technology. According to MDB PatentVest, RIM has more mobile device patents than anyone else.
Based on the recent jockeying for patents, it's clear that Apple, Microsoft, Google, and others see patents related to mobile technology as valuable and important. And given RIM's strong patent portfolio plus its low share price, it could be attractive to potential suitors, even though its current product line-up is in transition.
But who would be interested? That's the big question. Microsoft had been a rumored suitor, but as noted above, the company may not be interested in being saddled with a hardware provider at this time.
HP, which bought Palm for its WebOS, could be another candidate, or perhaps one of the other hardware companies, such as Samsung, may be interested.
RIM's other option may be to spin off its patent portfolio into a separate patent-holding company that licenses the patents to other companies. It's unclear what will happen, but RIM's outlook now may be better than it was last week.
4. Sony Ericsson may feel pressure to monetize its patents.
Sony Ericsson, a relative small player in the overall smartphone market, may also look for ways to extract some value from its patent holdings. Sony Ericsson, formed in 2001, is owned in a 50-50 partnership between Sony of Japan and Ericsson of Sweden. Together its parent companies own 1,470 patents specific to mobile devices.
In recent years, the company, which has always been a bit of niche player, has struggled to keep up with rivals. And it's continued to lose market share, despite shifting from the Symbian mobile platform to Android.
In the second quarter of 2011, Sony Ericsson's total mobile device market share fell to 1.7 percent from 3 percent a year ago, according to Gartner. Chinese manufacturer Huawei bumped it from the No. 9 spot. And Sony Ericsson is now in the No. 10 spot in terms of worldwide device sales.
As a result of its poor performance, investors may pressure the company to do something with these patents.
5. Apple (or someone else) could spend a whole lot of dough on the Kodak imaging patents.
It's clear that battle being fought in the mobile market right now is over patents. My CNET colleague Jay Greene recently wrote in a piece that the next big portfolio of patents to go up for sale will likely come from Kodak. Last month, the imaging company said it was considering selling about 1,100 patents that cover capturing, storing, organizing, and sharing digital images. These patents cover technology that is increasingly becoming important in mobile devices.
And one particular patent that is likely to be included in the batch that Kodak plans to sell may be end up starting one of the most ferocious bidding wars to date for mobile patents. The patent in question covers image previewing technology that Kodak alleges is being infringed upon by Apple and Research In Motion.
Even though its unclear whether Apple or RIM is infringing on the Kodak imaging patent, Apple will likely bid on this patent simply to keep it out of the hands of its rivals, namely Google.
"If you're Apple, are you going to let Google buy those patents? No way," Christopher A. Marlett, chief executive of MDB Capital Group, an investment banking firm that focuses on intellectual property, told CNET for a previous story.
There is a good chance that the bidding on these patents could go very high. Indeed, the value of mobile and communications related patents has already been high. According to recent estimates by Sanford Bernstein, Google's $12.5 billion bid for Motorola will give it access to about 24,500 patents at a price of about $350,000 per patent. Meanwhile, Apple, RIM, Microsoft and other players, paid a total of $4.5 billion for the Nortel Networks patents. This works out to about $750,000 per patent.
With $76 billion in cash and marketable securities as of the end of June, Apple is certainly in a strong position to pay what it must to secure whatever intellectual property it needs.