Home Articles Google’s $12.5bn Motorola bid has mobile industry in a tizz

Google’s $12.5bn Motorola bid has mobile industry in a tizz


Google’s recent announcement that it had snapped up Motorola Mobility for a cool $12.5bn cash has techie types all a-quiver.

Top smartphone and tablet manufacturers that use Google’s Android operating system to power their devices have put on their game faces following the announcement.

However, many pundits have speculated that they’re collectively bricking it (our words, not theirs).

Is Android unstoppable?

Google’s Android holds the title of number one smartphone OS thanks largely to its aggressive adoption by the likes of Samsung and HTC. Some industry observers now believe that the manufacturers will send Android to Coventry due to Google’s efforts to muscle in on their turf.

Google’s move to buy Motorola, which still needs the green light from the US Federal Government, has also raised questions regarding how long the Android OS will remain open source.

Ovum Principal Analyst Tony Cripps says Google’s latest acquisition will not cause manufacturers to abandon the OS. However, “they may question the depth of their involvement.”

Cripps highlights a dearth of viable substitutes to Android as one of the key reasons Google’s soon-to-be competitors are unlikely to jump ship.

“Most licensed alternatives don’t offer the same level of service integration needed to attract buyers to their hardware.”

“The main alternative to Android, Windows Phone, is barely different to Android from a competition perspective. Microsoft too sees its mobile OS investment as a Trojan horse for its consumer services, and more broadly its consumer-related interests, including advertising.”

“So it would be a case of ‘out of the frying pan and into the fire’ for most Android licensees if they were to take this approach.”

“As for the other mobile OSs in the market, neither RIM’s BlackBerry OS nor iOS are licensed, rendering them off limits to Android OEMs.”

Google’s latest manoeuvre may have helped to crystallise manufacturers’ concerns regarding their growing dependence on Android (and potentially Windows), Cripps speculates.

“At its root, there’s a very real sense in which many smart device OEMs are now beholden to Google and – albeit currently to a lesser extent – to Microsoft for device OSs.”

“The dependence… comes from a promise of hardware sales driven by the expectations consumers have of their devices resulting from using the software.”

“Those expectations arise not only in terms of hardware design but also in terms of the applications, content, and experiences
those devices provide access to.”

And what of Apple in all this?

“In this light, the acquisition of Motorola Mobility presents the strongest means at Google’s disposal to challenge Apple,” Cripps says.

“Indeed, we would not be surprised if part of the subtext to this acquisition is to revivify Motorola and to restore it to its former position of US tech archetype, a position it only lost in the past few years to Apple.”

Motorola Mobility currently lays claim to around 2.8 per cent of the global handset market. Plus, let’s not forget its portfolio of over 17,000 patents and another 7,000 patents pending globally.

With an increasingly lawsuit-happy Apple on the loose, Google’s acquisition of Motorola may ultimately give both the search giant and Android licensees more freedom to say ‘No, you are!’ (or the highfalutin legal equivalent) to Steve Jobs and his posse, Cripps speculates.

“If nothing else, Google’s expanded patent portfolio will give it… more latitude to point the metaphorical intellectual property gun back at its rivals in cases of dispute in what is set to become a very litigious age in the consumer and communications technology spaces.”