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Image credit: Gayle L McDowell
Speculation abound, folks. On Monday, Google proposed to purchase Motorola. I’m sure everyone in the tech world knows that by now. Not only 4 days later, people are speculating on what should happen next. Yesterday, I raved about five things I’d love to see come out of the Google/Motorola deal and many of you chimed in with your own thoughts.
Some people, however, think Google won’t even get a chance to do anything with Motorola as they believe the company will eventually have to be sold off, sans patents. This would obviously surprise us considering how highly Motorola CEO Sanjay Jha spoke of the deal and how they could help shape the evolution of Android because of it. Perhaps he just meant they would be “helping” by giving Google the patents they need to get back to working on Android without all of the legal stuff on the side.
Their (the analysts’) argument is that Google could risk damaging relationships with their current OEM partners if Motorola ends up improving in market share and revenue.
Although Google has clearly stated that Motorola would be independently run as a separate entity and that they would not box Motorola’s competitors out of the Android ecosystem, it’s possible they could see any bit of special treatment as a sign of favoritism toward Motorola and dump Android in fear that Google will eventually become another RIM or Apple.
For instance, if that Nexus tablet we all want happens to be made by Motorola, competing OEMs will most likely call foul (even if they won’t publicly). And if Motorola gets major versions of Android before everyone else? That’s a riot waiting to happen.
Because of these reasons, some analysts think Google will quickly integrate their newly-acquired patents into their own portfolio and sell Motorola to someone else once that’s complete. Most think Sony Ericsson and Huawei would be best fits for the sale due to their need to strengthen their market presence in regions where Motorola currently shines.
It would be an interesting move by Google if they do end up doing something like that. I can’t imagine Motorola would like to be, and excuse my french, whored out to other companies after being stripped of their patents. But that’s all speculation and, at the end of the day, it’s Google’s call.
Analysts believe the sale of Motorola Mobility without the patents would attract at least $1 billion and could be worth as much as $5 billion.
So this can only be treated as a “what-if” scenario. If OEMs start to get antsy over Google and Motorola, Google might have to sell Motorola in order to make the many partners who make Android successful happy by making them believe there is no favoritism.
Conversely, if OEMs don’t care then Google will probably just sit on Motorola and enjoy the patents all the same. In any case, the buyout has yet to be approved and we shouldn’t even be talking about another sale until this one is completed. [Reuters]
That’d be a good move if Google sells off Motorola Mobility after.
This article is pretty stupid. Google isn’t going to sell anything.
I think they will hold on to the set top box division. OEM’s don’t generally compete in that market and it makes sense for a multitude of reasons for them to hold on to it. Google wants to make TV’s in America searchable and have android as well.
No! They have to buy T-mobile so that Google will make the software, the hardware, and then sell it directly to the consumer, and all updates will be sent out immediately. Why can’t my dream come true =[
Because the Justice Department would not let that happen. AT&T had to stop selling their own branded phones and that type of vertical integration would not sit well with a lot of people. Granted I think it would be awesome myself if Google were to buy a telecom company.
Yes.
12+ Billion for MMI…..?
39 Billion for T-Mobile looks like a bargain. Data delivery is where they will focus next.
The google model will work exceptionally well…..deliver it at close to cost to the consumer, and make it from the advertisers….
Who won’t switch to Google Wireless at $40 a month unlimited everything!
When the upcoming generations of wireless equal the cable data rates…you’ll have everything you’ll ever need in your pocket.
I would switch over in a heartbeat. Even though T-mobile doesn’t have great service in my area, especially when compared to Verizon, I would easily trade up to get a Nexus 3/Prime on Google Wireless.
I’m still wondering how many are actually phone patents. Being they have such a large product line I imagine not nearly as many as we think. I think its mote about the overall outlook of android and not just phones. Maybe they sell off just the phone part but I think they really need the tv part. Maybe they can keep prices down to get some market share. It’s what has in part been killing Google tv. The cost was just to high
They have 24,500 patents and I believe I read somewhere that 17,000 of those were for mobile phones.
They’re only buying off Motorola Mobile and not the whole company. I guess the only patents that come with this are those that are phone-related.
I imagine the nuts and bolts of whether or not to sell off Moto (but keep the patents) would be an analysis of what would make them more money for the long term…Sell off Moto and allay OEM fears, thereby keeping them using Android OS (but what’s the business model for making money here? Mobile ads?). Or keep Moto, have a share in the hardware sales side and have OEMs a little antsy about continuing to use Android?
I would think the latter is the course of action they’ll go with. For the OEMs, what choices do they really have if they wanted to abandon Android (the current global market share leader for mobile OSes)? Back to the drawing board and build their own (look how that turned out for HP/WebOS)? Swing over to Windows Mobile (royalties and closed-source)?
Even if Google decides to play favourite child with Moto and the Nexus line, I really don’t see the huge impact. I haven’t seen concrete numbers but so called ‘Pure Google’ devices are not at the top of the Android food chain in terms of sales. Nexus One, although a great phone was more to push OEM’s into making their handsets better. The Nexus S was to push NFC and Google wallet. The first Pure Google tablet did not live up to the hype at all. My question is do OEM’s really even want to build Nexus devices vs. their own that seem to be more successful?
I don’t think they will sell right away. Moto makes a lot more then just phones… Moto could be huge in making Android at home a reality. Moto makes most of the cable boxes used but companies like Comcast. I can see them using Moto to make Google TV/android part of those boxes.
getting Google’s name on those boxes and saying hey you can do all of this integration with your phone and this and that and go buy a Google phone and click on our ads.
The line I found most humorous was “if Motorola gets major versions of Android before everyone else” – what, you mean like Android 2.0? Or Android 3.0?
Seriously, who would want to splurge on a patent-less and storied tech company like Motorola? It’s all about the war chest (patents). Like Google has mainteined, they’ll keep Motorola running as a separate/independent entity.
This is by far the single best analysis on the whole Google-Motorola buyout. Like him or hate or don’t even know him, Jeff Jarvis knows media & how public relations work.
http://www.buzzmachine.com/2011/08/15/rat-poison/#comments
You mean because he bashes anything not owned by google? The guy is a halfwit. I think I’ll just copy his articles verbatim and use them on my own blog – see if he agrees to it.
Google and its partners don’t innovate, they just copy. This is why they’re being sued left ,right, and center.
Congratulations you are the perfect Apple customer. Do you even know who Jeff Jarvis is? Based on your comment no. Troll elsewhere my bridge is full.
What I think the analyst the author of the article failed to realize is if any of Google’s OEM partners get upset because of “special treatment”…ummm…so. Where are they going to go??? What else is out there? MS? They will probably just have deal until the next best thing comes out. They also have to worry about losing people that would use their devices. Google actually has the perfect set up right now.
Android is where it is because of it’s openness. If Motorola phones where the only ones with the OS and every other manufacturer switching to another OS that OS share would climb and Android’s share would fall. It’s popular because it’a a combination of being a great OS and being available to all manufacturers.
I agree with 155, it is very likely that they would hold on to the cable business. Most likely, they would absorb that division into google and rebrand the boxes as google units, install google tv on them and sell them to the cable providers in the same way that they do now but with much better software.
The only other OEM that would be choked about this is Cisco, but they are a minor android player right now anyways with limited tablet offerings.
I’m hoping Google will keep Motorola’s phone division and at the least use it for the same reason they made the Nexus series in the first place… to push new technology and better specs. Not to mention hopefully unlocking bootloaders. The other companies would have the same options available as long as Motorola didn’t enter into any exclusivity agreements with TI, Nvidia, Intel, etc.. so it’s just more competition. Of course the other companies wont like it if it drives down prices, but Google has generally been Pro-Google and Pro-Consumer.
why do you keep pandering for a nexus tablet when it already exists? It’s called the Xoom.
1. It’s a GED (Google Experience Device) and gets it’s updates direct from Google.
2. It ships unlocked.
3. Heck it’s now owned top to bottom by Google (motorola hardware).
It literally has all the features of any other nexus line, including getting all honeycomb updates before anyone else.
its better if they make motorola more google and keep it and just stop nexus and favor all manufactures and have a deadline where all android phones with in next 6 months are updated. why sell a company that made google known with the og droid and now the bionic its stupid and foul. run it behind the scenes and keep on buying more patents so lame companies like apple can stop. htc already makes windows samsung has bada so who cares.
HTC made android known not Moto… the droid came around 1 year after the G1…
agreed
I cannot imagine this not being an either/or situation. At least not if Google is interested in acting like a real business, and on the surface, this move signals that they are. It will be either, Google bought Moto not just for patents, but also to get leverage over hardware. Whether they are going in full bore, or will just ease into making Android more integrated from the top down, there is a ton of profit that they could make directly from hardware and from the OS that they aren’t making now.
Or, and this is probably more likely, this deal was just about patents. If it was, then you can kiss Moto goodbye within a few years. Motorola Mobility got hammered last quarter, and hasn’t been the prime Android manufacturer since the initial Droid. They have lost 4.4 BILLION over the last 3 years. They just haven’t kept up with Samsung and HTC.
If Google isn’t interested in getting involved in hardware, then why the heck would they swallow Moto’s sea of red ink due to mediocre performance just to hold onto patents? Why would Google waste time fixing Motorola if they aren’t going to take full advantage and reap a whirlwind of profit? It won’t be immediate, but if Google isn’t interested in more direct control, then Moto will be sold off at a later time.
As far as I’m concerned, nothing in between these two extremes makes any business sense whatsoever.
As far as set top boxes go, Google can probably benefit from the inside knowledge they can gain from such a closed industry. Maybe this can be an “in” for them. However, to think that just because Google now owns Moto, that Android and Google interfaces will suddenly show up in cable modems and set top boxes is an EXTREME stretch of the imagination. This is an very closed and controlled industry we are talking about. Cable providers and programming providers don’t want Google, Apple, or anyone else who’s not already at the table to get a seat. Those companies dictate what is in set top boxes, so just because Moto has an interest in putting Android or Google TV, or anything else in them, those in control of that industry dictate the device specs. As such, they can still keep Google at bay as long as they want to.
Yes, I do realize that Dish Network offers a discounted Logitech Revue set top box with Google TV and some additional integration with their service. However, remember that they are the “value brand” of the cable and satellite world. That’s similar to Sprint and T-Mobile bragging about how great their fake 4G services and “Unlimited” Internet are, while AT&T and Verizon continue to either dwarf them or swallow them whole. None of the bigger nationwide providers are interested in letting someone else get any control over that pipeline into the home.