Shocking. Google buys Motorola. Why? Google’s Android smart phone OS was about to become a digital piñata at a Google-bashing party hosted by Apple and Micorosoft and Nokia. Why? The free Android OS has disrupted the smart phone space, and vested interests were crying out, “We have patents. You don’t.” Here’s who wins and who loses in the deal.
In exchange for $12-billion, Google gets thousands of Motorola patents to help Android survive, though there’s no guarantee that the platform will prosper. Google makes money indirectly through advertising, and, so far, Android users don’t use enough internet or apps to help Google get a payback. Still, Google is better off with Motorola than without.
Motorola also wins. Shareholders get money to invest elsewhere. Motorola gets to be first in line for Android updates, because, you know, it’s open.
Nokia and RIM (BlackBerry) could win from the deal. Both are heading south during the Android storm, and when Motorola makes Google’s best Android smart phones faster than current Android licensees Samsung, HTC, and friends, the latter may look for other alternatives, which would give temporary breathing space to the ugly twins and Microsoft’s puppet phone maker.
Microsoft may buy Nokia, which would give the Windows maker a manufacturing arm, and give Nokia a modern smart phone OS. Both would become winners of sorts.
Google’s purchase of Motorola tells the whole world that Apple’s method of controlling the whole widget, complete software to hardware integration, is the best way to go. Google loses credibility, and may lose Android licensees by the dozens.
Nokia remains a loser if Microsoft doesn’t buy them out. Ditto for BlackBerry. Both are headed for niche status as Microsoft, Apple, and Google carve up what’s left of the smart phone era.
Android licensees are the really big losers. Anybody remember PlaysForSure from Microsoft? Then Microsoft manufactures the Zune. Everybody lost but Apple.
Winners And Losers
Apple doesn’t lose but it doesn’t win, either. The patent wars will continue. If Motorola’s huge storage of patents could have felled Apple, it would have done so by now. How much leverage will Apple hold over Android licensees now?
Android licensees are both winners and losers. Winners, perhaps because Android can be more easily defended (or, maybe not). Losers because Android is now more competition than ever for Android licensees.
A Mess Gets More Messy
More succinctly, Google’s purchase of Motorola makes the playing field a bigger mess than it was. $12-billion? Seriously? Assuming that Android-licensees (or, Google) would have to pay competitors $5 per smart phone as a licensing fee, that’s 2.4-billion smart phones. Billion. How many hundred of billions of smart phone ads are required to make up for that $12-billion?
The smart phones that are selling in big numbers are from Apple and Android licensees. Of those, most of the profits go to Apple. Clearly, Google is desperate. So was Motorola. So was Microsoft with the Nokia deal. So was Nokia with the Microsoft deal.
Who will buy RIM now?
This whole smart phone mess is like a long, slow motion train wreck. It’s bad. It’s messy. But you can’t take your eyes off of it.