Google, Motorola Deal Will Impact Apple's Business: 10 Reasons Why

 
 
By Don Reisinger  |  Posted 2011-08-16 Email Print this article Print
 
 
 
 
 
 
 

News Analysis: The early signs are that investors don't believe that a Google buyout of Motorola Mobility will significantly hurt Apple's business. But is that really the case? Once the Google-Motorola partnership gets going, Apple may find it has to work even harder to maintain its position in the mobile industry.

Google's blockbuster deal to acquire Motorola Mobility for $12.5 billion has set analysts, critics and industry observers on a tear predicting what might happen across the industry. But it was Apple's stock price following the announcement that perhaps stirred the most speculation about what the future might look like for companies in the mobile space.

Following the announcement of Google acquiring Motorola Mobility, Apple's shares gained on their Monday opening price. On Aug. 16, the shares were initially down, sparking some to wonder if investors are becoming gun shy by Google's news. However, it seems that the dominant thought on both Wall Street and Main Street is that Apple will be totally unaffected by the deal. When it's all said and done, the iPhone maker will still sit atop the mobile space with no real threat from Google or Motorola Mobility.

But that might not be the case. As powerful as Apple is, and as important as its iPhone and iPad are to the mobile space, the company will be affected by the acquisition.

Read on to find out why:

1. Motorola was on its heels

Motorola Mobility was doing a fine job of competing against Apple and all other competitors in the mobile space prior to the acquisition. The company's line of Android phones were well-built, priced affordably and generally some of the better options for those who didn't want an iPhone. Now that Motorola Mobility will have Google behind it what makes anyone think that its level of quality won't only improve?

2. Google has the cash

One of the biggest issues with Motorola Mobility has been its inability to invest the kind of cash in its platforms that Apple has in the iPhone to keep competitors at bay. But now that Google will be putting its cash up to help Motorola Mobility, all bets are off. It shouldn't surprise anyone if Motorola offers up some vastly improved devices featuring forward-thinking technologies that could put Apple on notice. It seems now that a spending war is sure to happen.

3. Consider the Android issue

Over the last few years, customers have grown increasingly fond of Android to the detriment of iOS, BlackBerry OS and other mobile platforms. Now that Motorola Mobility is on Google's side, expect that issue to become even greater for Apple as consumers warm to the idea of having products designed and sold by Google. Make no mistake, Google's brand means something in today's marketplace and it could help improve Motorola sales and thus hurt sales of other products, including the iPhone.

4. Now two Android vendors are threats

It's important to note that for the most part, Samsung was Apple's only major threat in the mobile space. That company was nearing quarterly smartphone sales that matched Apple's. But now that Motorola is working with Google there is a good chance consumers will buy more Motorola devices. Apple must now worry about the size and growth of two competitors. Simply put, Apple's concerns in the mobile space just doubled.



 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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