Google is set to acquire the Mobility division of Motorola in an effort to “supercharge” Android and “offer wonderful user experiences.” That’s big news with far reaching consequences — especially for other Google Android partners like HTC and Samsung. With Google owning a manufacturing arm for mobile phones, what can we expect the future of the Android landscape to look like, and more importantly, what’s going on with Google? Perspective you can only get here on The VAR Guy follows…
First, you’ll want the nitty gritty. Google is set to acquire Motorola Mobility for $12.6 billion, which means Google is paying “a premium of 63 percent,” based on Motorola Mobility’s closing stock price on August 12, 2011. Google’s plans to enhance the Android user experience by making Android software and Motorola Mobility hardware integration silky smooth.
Seeking Patents
Google promises that Android will remain open for other hardware manufacturers to fully leverage. Google also says Motorola Mobility will be run as a separate business, but I think we all really know the real reason that Google wanted Motorola. Patents. Motorola Mobility is in possession of an extensive patent portfolio that was the envy of many. According to Google CEO Larry Page, on his official blog, patent disputes were one of the reasons for the acquisition. Page has said that…
We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to “protect competition and innovation in the open source software community” and it is currently looking into the results of the Nortel auction. 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.
Software-Hardware Integration
Okay, but there’s more, isn’t there? Yup. Remember how Android Honeycomb was locked down so Google could control the tablet user experience? It seems to me Google liked that level of control so much they wanted a little more of it. It’s very possible Google has been disappointed with what OEMs have done with Android devices, either feeling they’re underpowered or simply slapped together with little concern about melding the OS with the hardware. Bad Android phones gives Android a bad rap, no matter how many good Android phones arrive.
With Google controlling the hardware side of things, Android could blossom into something very beautiful, something that could directly attack Apple in terms of quality of software, hardware integration and user experience. I know this statement is a bit subjective, but some critics often say Android hardware just isn’t sexy. With Motorola patents under its arm, Google will be at liberty to deploy a plethora of cool hardware tweaks and modifications, essentially building the ultimate Android phone. Vertical integration, just like Apple.
Bad News for Android Partners?
If you’re the careful observer, you might say, “Hey, Google is undercutting the other Android handset manufacturers, aren’t they?” Although Google has sworn up and down that they are committed to working with all existing partners, in a way, they are undercutting partners.
You could imagine in the future that these partners will be pitting their own hardware against Google’s own “pure” Android phone, which will likely be billed as the best Android phone ever (and maybe less ‘disposable.’) Isn’t that anti-competitive? How can other OEMs compete with that? I’m guessing it will be on price and unique feature sets, and perhaps even on basic hardware specifications. Like Apple has shown, however, hardware specifications aren’t everything when the hardware and software are optimized together.
On a Positive Note…
To be fair, despite how rough this news may be for a company like HTC or Samsung, Android will likely gain a much better reputation from whatever Motorola-Google lovechild springs forth. Tangentially, other manufactures could see a spike in their own sales, too. If Google proves that Android can match iOS in terms of reliability and quality, that could really put Android on top not just in terms of mobile phones, but as a mobile operating system that could be deployed more consistently and in more mission-critical devices.
Competition is the life blood of innovation, so I’m excited to see where this is all headed, but Google should be careful, especially with anti-trust probes arriving from the FTC. Meanwhile, Google says the complete acquisition will close sometime at the end of 2011, if not early 2012.
We’ll be watching.
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Android’s raison d’etre is to create a standards-based future for the web. Google has no interest in cutting the legs out from under its partners and going backwards on the standards front. The company intends to be the largest boat lifted by the standards tide.
In fact, HTC’s, LG’s, and other major players’ CEOs have already come forward praising the acquisition, because they know that Google will have the patents (with about 6000 more in the pipeline) to defend Android against Apple and other handset makers. Plus, HTC, Samsung, and LG son’t have to be worried about being sued by Motorola anymore.
Nexus phones and tablets will certainly come from Motorola-the-Google-subsidiary, but those have _never_ been serious contenders in the market. Android has proven that there are many different feature sets and price points for smart phones. Expect Google’s Android partners to take advantage of those.
Handset vendors like HTC and Samsung have already proven their ability to add enhancements beyond the base Android platform. They had nothing to fear from Motorola and Google before, they don’t have anything to fear from them now.
Acquisitions have a low record of any kind of success. I think Google did this strictly for the patents. Its past misadventures with trying to sell its own handsets should have convinced it that trying to get into that business is a stupid idea.
Hey Lawrence and Daeng Bo,
I appreciate your comments and I think you guys are absolutely right, this is likely more about the patents than anything else. Perhaps I was quick to judge, and maybe Android partners will find life easier now that Motorola Mobility is under the wing of Google.
But I can’t help but feeling like Google wants to directly attack Apple in some shape or form. Their closed-source nature about Honeycomb leads me to believe this, since clearly Google had a vision for the way the operating system should be used and laid out. No two Android phones are truly alike, but all Honeycomb tablets look and feel essentially the same from a GUI perspective.
Maybe I’m naive, but I just feel like Google is looking for more “wow” factor in their Android offerings and they’re worried OEMs can’t deliver.
Ostensibly, however, I believe you’re both correct.
Let’s see what happens!
Thanks for reading,
-Dave
The VAR Guy has to weigh in on this one.
Our resident blogger’s personal belief: Publicly, HTC and LG executives may praise the Google-Motorola Mobility combination. But what else could they possibly say? Privately, The VAR Guy suspects those executives are nervous about competing with the combined Google-Motorola Mobility efforts.
Just The VAR Guy’s two cents.
-TVG
They’re probably nervous, but I also suspect there was pre-announcement discussion between Google + 1 CEOs about this in order to allay as many fears as possible.
Daeng Bo:
Google is a publicly held company; no way Google could have had “pre-announcement” discussions with other Mobile CEOs. But certainly, Google made some fast phone calls post-announcement.
-TVG
That was very illustrative read!!