NEWS ANALYSIS: With its Motorola Mobility acquisition, Google is now one of the world's largest manufacturers of mobile products with influence over the future of devices, ranging from smartphones to tablets.
Motorola Mobility shareholders on Nov. 17 overwhelmingly
approved Google's $12.5 acquisition of the company. While friendly mergers typically result in 60 to 70 percent
of stockholders approving the deal, the fact that 99 percent of Motorola's
shareholders approved Google's offer shows the group believes the company would
do better as a subsidiary of the search-engine giant than as an independent
If there was any concern at all about Google buying Motorola
Mobility, it was the idea that Motorola would get advance access to future
releases of Android. This would create an unfair advantage against other
Android partners such as Samsung and HTC. Google has assured regulators and
Android licensees that this is not the case. Motorola, Google says, will be
treated just like other licensees and will get advance versions of Android at
the same time.
As far as Android is concerned, I do expect that senior executives
at Motorola will have a lot to say about the future of the mobile operating
system. While they may not get access to the final releases of Android any
faster than, say, the folks at Samsung, Motorola executives will be "all
over" the Googleplex in Mountain View, Calif., giving advice and making
recommendations to Andy Rubin and his Android team on what features they want
Google to incorporate into future releases of Android.
However, there is going to be a massive change in the
opposite direction: Google is going to play an instrumental-perhaps even a leadership-role
in the product-development process at Motorola. After all, Google will own Motorola and will be able to
direct the management of the Motorola Mobility subsidiary regarding what
products the company decides to design and build.
And this thought-that Google will direct product development
at Motorola-is likely one of the major reasons that Google acquired Motorola
Mobility in the first place (besides the treasure chest of patents).
During the past couple of years, Google has tried rather
unsuccessfully to build a smartphone. The Nexus One was an attempt by Google to
build a smartphone and offer it directly to consumers as an open device that buyers
would then register on the wireless carrier network of their choice, more like the
way in which mobile handsets are acquired in other parts of the world.
Google wasn't able to successfully get consumers to buy the
Nexus One, primarily due to the strong position carriers have in setting lower
price-points for mobile devices and then making up the loss as part of the
monthly contract with the customer.
J. Gerry Purdy, Ph.D., is Principal Analyst of Mobile & Wireless at MobileTrax LLC. Dr. Purdy has been covering mobile, wireless, cloud & enterprise for the past 20+ years. He writes analysis and recommendations each week in an easy-to-read manner that helps people better understand important technology issues and assist them in making better technology purchasing decisions.
Disclosure Statement: From time to time, I may have a direct or indirect equity position in a company that is mentioned in a column. If that situation happens, then I'll disclose it at that time.