Since Monday’s announcement of Google’s multi-billion-dollar acquisition of Motorola, the media has been buzzing on what is the largest deal in Google’s history. While Google continues to reiterate that it is a protective move that allows using Moto’s patents to protect its Android OS from anti-competitive threats, it is fascinating to speculate about the fate of all players involved. So what might be next for “Googlerola”, for its partners and competitors, for Android and – last but not least – for the consumer?
Reading the media reaction to Google’s acquisition of Motorola Mobility, it becomes clear that the move is not solely “defensive” as Google’s PR machine is trying to suggest. Sure, after losing the 6,000+ Nortel-patents to the Apple-Microsoft-led consortium just a little over a month ago, Motorola’s intellectual property of some 17,000 patents comes as a welcome infusion for Android, but more importantly Googlerola will now be able to build truly market-leading mobile devices that finally deliver a fully integrated Android hardware and software experience.
While it might be too early to sell your Google shares, not all is good in Mountain View: Google has just increased its workforce from 30,000 to 50,000 employees and has acquired 90+ low-margin hardware factories in an information-centric world that it dominates.
More importantly, beyond the mere numbers, it will be challenging for the search-giant to cope with the obvious looming cultural clash that might in the end tip the scales.
Android Partners and Competitors
Upon acquisition of Android, Google founded the Open Handset Alliance – “a consortium of 80 hardware, software, and telecommunication companies” (Wikipedia), the most important device manufacturers of which certainly have reason to feel threatened by Googlerola. The suspiciously uniform partner responses seem to spell trouble:
“We welcome today’s news, which demonstrates Googles deep commitment to defending Android, its partners, and the ecosystem.”
JK Shin, President, Samsung Mobile
“We welcome the news of today’s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”
Peter Chou, CEO, HTC
“I welcome Google’s commitment to defending Android and its partners.”
Bert Nordberg, CEO, Sony Ericsson
“We welcome Google’s commitment to defending Android and its partners.”
Jong-Seok Park, CEO, LG Mobile
Even before the news broke, Nokia’s stance against Android (and for Windows Phone), HP’s attempt at reviving Palm’s WebOS and Samsung’s move to create their own “Bada” OS late last year raised quite a few eyebrows.
While Nokia yet has to deliver a Windows Phone product, the Finnish market leader detailed aspects of their plans for the platform today. Samsung has shipped an estimated quarter of its 20 million smartphone shipments in Q2 powered by Bada (with a year-by-year growth rate of 355%!). Furthermore, two days after Google’s big shopping spree, Samsung’s chairman Lee Kun-hee demands from its company to “enhance its software prowess”. Wow!
So now that Samsung is showing that it can work and others are in the midst of trying, what keeps the LG’s and HTC’s and Sony Ericsson’s from attempting the same – especially now that Google has turned into a full-fledged competitor?
And what about Microsoft? As of today, they are the sole provider of a mobile operating system that does not come with integrated hardware and will have to figure out how to play in the mobile space once again. Maybe it’s time to produce some Redmond-designed phones?
The previously stale mobile phone market is suddenly fresh and exciting again and I expect the players to reevaluate their strategies and to react to the changed situation with enthusiastic new plans.
The Android Platform
I am wondering what the move means for Android as a market-leading platform that seems to dominate with “quantity” rather than “quality” (think: number of features, manufacturers, carriers, handsets).
Not even three years after the release of HTC’s “Dream”, Android feels more bloated and obese than Windows ever managed to become (“Longhorns” never were the most nimble of animals).
Android is extremely fragmented and doesn’t allow for much differentiation between Google’s partners (read: competitors), unless they inflate customize their flavor of the operating system even more.
There is certainly some word of caution in historic attempts to integrate hardware and software in this arena: Steve Jobs stopped the “Apple Clone” program after his return to Cupertino at the end of the 90’s, Microsoft never built their own laptops and Nokia’s acquisition of Symbian marked the beginning of the demise of that operating system. According to asymco’s Horace Dediu, “This is classic channel conflict and never ends well.”
Android will certainly not fade away, and it will probably not lose its market leading position either. However, the acquisition might however strengthen some competitors and will spark others to appear in the arena.
So what’s in it for us? Gizmodo is quick to point out “Samsung, HTC, et al, are going to need another avenue of attack, since Motorola branded products are going to theoretically have a major advantage”.
All these possible “avenues” are what will make Google’s acquisition of Motorola so interesting in the coming months and I strongly believe that the event will act as a catalyst in the development of a multitude of new and improved mobile products.
Paraphrasing JK Shin, Peter Chou, Bert Nordberg and Jong-Seok Park “I welcome the news” and hope that in the end the consumer will win.