Google's Motorola Deal Opens the Doors for Android's Future Development

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 business.

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.