by Chris Silva
The news outlets have been abuzz today with the news that Google is acquiring Motorola’s handset business for $12.5Billion. The question on everyone’s mind is what this move between two major players in the space means for the future of mobile as we know it. I’ve got some opinions and I’m interested in yours, too.
Here’s how I see this playing out – a detailed outline of the first item is available on my blog:
- This is an ecosystem play: Taking on a hardware company, Google isn’t trying to get into a business that its first foray into was, well, less than stellar. This isn’t about selling more elements in the mobile supply chain, this is about moving Android into an experience sale. Through its mobile apps and services consumable on mobile, its Android OS to run mobile devices, Google has had 2/3 of the mobile picture in its portfolio but was lacking control over platform consistency to make sure it all “just works.” Consumers – and especially businesses – don’t want to buy a phone, they want to buy an ecosystem of services and hardware tools that work in concert. Google will gain the missing piece in Motorola.
- Patents matter: Some of the comments I’ve been hearing around mobile lately have been speculating about how much damage Google losing a major patent bid will have on its business. Taking on the handset business of Motorola, Google gains some ground in the patent space allowing it to head-off potential hurdles in creating devices that matter to enterprises and consumers without as much concern for being stopped in its tracks, a tactic we’ve seen more of in the mobile space of late.
- It’s not just about smartphones: Remember the launch of Google TV and how it was supposed to change the way the family gathered in the living room? Yeah, I haven’t seen that yet, either. Some companies – like Boxee and Roku – have had outsized success in penetrating the entertainment center, but that’s largely because they had a baseline of 0 users and are small firms. In order for Google to penetrate the living room – and hopefully they’ll come up with a better strategic slogan – they need a channel. Go look at your cable box… chances are that it’s got a Motorola logo on it. Motorola Mobility “…includes set tops and data access devices.” Now, Google’s massive video warehouse and its store of data on user preferences has a channel to the television. Not a minor asset in this deal.
So what happens? If the market is lucky and the marriage goes well, I expect we’ll see some good, use-case marketed Android offerings come along, something lacking in a space where the major competing product is a lifestyle sale not based on cores, speeds and displays. Patent squabbles resume their rightful place in the backseat, putting innovation back at the helm of this still-emerging space and GoogleTV gets another bite at the consumer apple, just in time for AppleTV to start getting interesting on its own, I surmise. Google has pledged to continue supporting other players in the Android platform world, however, it’s not about Google supporting them, it’s about them supporting Google as component OEMs, a difficult future to see if Google/Motorola start to steal market share.
How does this announcement change things for you, do you wait it out, buy with confidence or shift allegiances? Let us know in the comments!