Ronnie05's Blog

Impact Analysis: Google buys out Moto (Part II- Made for each other)

Posted in Industry updates by Manas Ganguly on August 16, 2011

Read Part I

Google is pulling off an acquisition that is larger than any that Microsoft, Apple, or any of their other main competitors ever have. The Moto acquisition is either the smartest thing Google has ever done, or the dumbest. A $12.5 billion deal in cash, with a $2.5 billion collapse clause? There is no in-between

In a series of blogs over the next few days, I would be analyzing the impact of the Google-Moto deal in terms of:
1. Patents Leverage
2. Platform/Hardware Competence
3. Eco-system view
4. Impact on Telcos

Platform/Hardware Competence

On one hand, Google and the Android OEMs share the common objective of maximizing Android activations. However with this one deal, Google is now a powerful, wealthy competitor, one that is impatient with the long lead times in the hardware business.

Nexus Prime is the next Google Flagship smartphone on the horizon.. and while Google maintains that the vendor for each of its Smartphones is chosen through a democratic process, and the process might as well be as democratic as ever, Google’s acquisition of Moto gives it the necessary competences it was lacking in devices. One way or another, the existence of Motorola as a Google company is going to affect Android and its current device partners. The key here is Control. After all, its the tight control over both hardware and software is what allows Apple products to be Apple products.

Earlier, Google used to not care about design, but now is starting to which is why the Nexus series was born in the first case. I suspect Google’ll (or already has) start to care more about full control over their products — both hardware and software. They’ll see that the overall consumer experience is tied to both — they’re not mutually exclusive. And Motorola gives them the opportunity to fully explore this.

An integrated offering is the new mobile nirvana. Apple controls the software and hardware for its phones. Android from Google is popular but splintered. Google can now set a hardware/software agenda. Also doing rounds is the rumour that Google is working at making an ad sponsored software model for mobility. Moto can provide a platform for sponsorship. The Moto-Google partnership can also provide an ideal integrated platform for the go-to-mobile video solution that is being prepared by Google for YouTube.

Google’s penchant for control of the device experience is a great initiative. However, how it goes down with its current partners is an answer that will unfold in times to come.

To be continued

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