A day after the big announcement that Google would buy Motorola Mobility, we’re seeing a lot of reaction in the technology and financial media. When I blogged on this yesterday I focused on what I thought would be the really significant and non-obvious ramifications of the deal. Today I want to look at some of the more classical points, reflecting on the coverage the deal has gotten.
To most people the big question is whether Google is throwing Android partners to the wind. Well, yes and no. Yes, clearly Android partners would rather not see Google as a competitor if they had their druthers. No, it’s not likely that the buy will really put those partners at a net disadvantage, and in any event Google believes that Android is for most the only game in town. As we’ll see, they’re right.
The problem with Android today is it’s not only a horse designed by a committee, it’s a series of committees that aren’t even converged on “horse” as a goal. Nominally, Android is an open-source project whose code is eventually released for all. As a practical matter, the handset partners have influence on the state of development before such a public release. The problem is that they all have different goals and interests, the only common point being “mess up Apple”. While Android has the lion’s share of the handset market and is almost certain to have the same lead in tablets, it doesn’t have a conspicuous player to push it in the marketplace. Apple can run iPhone commercials because nobody else (well, nobody except maybe in China) makes iPhones but Apple. The Android players have to be careful with promotion, particularly of software features, lest they promote the platform and all their competitors as much as they promote themselves. Google’s entry into the market means that there will be a giant player who has every reason to want to push Android.
When IBM launched an open PC architecture, the competitors didn’t stay out of the space because IBM was still in it. They relied on IBM to promote the concept and then they focused on differentiating themselves versus IBM in implementing the concept. That’s what I expect will happen here. Android will be better for the deal, and partners will be better off.
Given this, you’re not going to be surprised to hear that this isn’t good for Nokia and Microsoft, as some on the Street have suggested. It’s bad. The “great-news-for-Nokia” theme is based on the presumption that all the current Android handset vendors, seeing the Giant Google Gorilla looming over them, would flee to Microsoft and Phone 7 or Windows 8. Ha! You flee from Google to Microsoft? How is that smart. Neither of the two would be favoring your personal interests, but at least Google is gaining market share with Android and Microsoft is losing it. I bet every Android handset vendor is sending press clippings of the “Flee-Android-For-Microsoft” stories to all their other Android-based competitors. Jump over, gang, and die on the vine while I live and prosper.
Might this mean that somebody will now buy Nokia? Sure. Google (owner of Android) buys Motorola Mobility (purveyor of Android handsets). Ergo Microsoft (owner of Phone 7) buys Nokia (you’ve figured out the relationship by now!) Well, that was the rumor all along. The deal opens no new buyers for Nokia, and I would contend it relieves pressure for Microsoft to do the deed, not increases it. With a big head-to-head battle between numbers one and two in smartphones and tablets, and with Nokia already jumping ship to Microsoft, where else can they go? Why buy Nokia when you own their soul already? Then of course, logic doesn’t seem to play with Microsoft these days, so I guess anything is possible.
The idea that Google is just sharpening its patent portfolio seems specious to me too. That’s a heck of a lot of money to pay to get patents. I don’t disagree that they’ll be happy to see the patents under their control instead of under Apple’s or inside some patent troll, but who thinks Motorola was going to be sold to Apple or some patent troll anyway? And InterDigital has plenty of mobile patents and has been on the block for a fraction of the price. And defense? MMI was an Android shop so Google probably wasn’t afraid they’d join the fray against Android. The MMI deal does make it possible for Google to present a stronger counter-position against the hordes of competitors it claims are conspiring against it, but that’s only as valuable as you think conspiracy theories are in general.
What does the deal do in the mobile appliance space? Hasten. It hastens, as I said yesterday, the expansion of both parties from appliances as a front-end for services to appliances and services as an integrated offering. It also hastens the migration of Android and iOS to more different devices, more form factors, more specialized appliances. It hastens because all of this was coming anyway; it just happens faster because the competition between Apple and Google is more direct.
Are there losers in this happy story (besides Microsoft and Nokia?) Sure. One example is Google ChromeOS. Google would be crazy to keep pushing that platform independent of Android at this point; they’ll only create confusion. HP loses with its WebOS platform for the same reason RIM loses (more) with its line. When two giants wrestle, the others in the market are collateral damage. Neither HP nor RIM can hope to muster the pace of innovation that we’ll see from Apple and Google now.