Google surprised the phone industry recently by
announcing that it had purchased Motorola’s smartphone and tablet business for
$12 billion. Google’s CEO, Larry Page, said the purchase would “supercharge”
its Android operating system and help the company extend into other business
ventures.
But in reality, it’s very evident that all Google seeks is
the control of over 17,000 patents owned by Motorola, which will help Google
protect its Android operating system. This is the first time Google has owned a
phone hardware business and is the largest investment the company has ever
made, dwarfing its previous purchase of DoubleClick for $3.1 billion in 2007. Google
announced its intent to acquire Motorola for $12.5 billion last August. The
deal has won regulatory approval in the U.S. and in Europe, but has been dealt
a delay by Chinese regulators.
The deal will put Google in direct competition with other
smartphone manufacturers such as Apple and Blackberry. Mr Page said that the
acquisition will be greatly beneficial to Google. Of course, this is
considering the simmering relationship with Microsoft over patent suits meant
to choke the Android platform. But the question is: what will Google do with
Motorola's world-spanning design and manufacturing facilities, not to mention
its 20,000 employees. Does Google really want to be a company that makes
actual, physical goods, or would it rather remain in the virtual realm?
After spending several weeks probing Google and Motorola
for clues as to what the companies will do once Google finalizes its
acquisition of Motorola, The Wall Street Journal's Dennis Berman concludes that
the answer is, well, inconclusive. Neither company is really sure how things
are going to work out, at least with respect to Motorola's smartphone business,
once Google owns the ailing phone maker.
“With mobility increasingly taking centre stage in the
computing revolution, the combination with Motorola is an extremely important
step in Google’s continuing evolution” said Page. Android is used in nearly half
of all smartphones and many major companies have gone to the courts claiming patent
infringement.
Mr. Page said that gaining Motorola’s patent portfolio
will “help protect Google from anticompetitive threats from Microsoft, Apple
and other companies.” The acquisition of Mobility is a gamble. Google can now
make their phones as good as Apple’s, but if rival manufacturers feel squeezed
by Google, they may look for alternatives to the Android operating system.
The sticking point is that Google is the creator,
distributor, and guardian of Android. Android is its wildly popular smartphone
platform. Google gives away the base code of Android for free, and in return is
allowed to install its goods and services on smartphones. Those smartphones,
however, are manufactured by some 55 different companies, including Samsung,
HTC, Sony Mobile, LG, Asus, and myriad others.
Google's Andy Rubin has said earlier this year that
Google will institute a "firewall' between its Android and Motorola teams
so there is no conflict of interest when it comes time for Google to provide
code to other hardware makers.
Google can't afford to tick off its hardware partners.
With 850,000 Android handsets being activated daily around the world, it risks
a huge opportunity if the ecosystem collapses. Even if Google can make its own
Android smartphones via Motorola, it could never make up for the losses that
would occur if other OEMs gave up on Android.
Therefore it seems more likely that Google may decide to
collapse the Motorola mobile brand business so as not to directly compete with
their hardware partners. If however it decides to continue the business, then
there’s every likelihood of a sharp drop in their hold within the mobile and
Tab sector in the near future, due to customer/market apathy. However, it’s
hard to imagine the end of hello-Moto!
No comments:
Post a Comment