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Impact Analysis: Google buys out Moto (Part IV- Would the operator become more redundant)

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 21, 2011

Read Part I, Part II and Part III

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

Impact on Telcos

There are some interesting potential side effects of this deal, such as in the broader consumer electronics space. Motorola could help Google turn around the disaster that has been Google TV. Motorola makes a huge percentage of the set top boxes that the cable companies use to push their over-priced content at you.

This then brings us to another interesting fall-out of this deal- How will the telcos react to Google taking over the role of content provider as well as the device maker. Google has long harboured intent of becoming a media business with emphasis on the content delivery. Google would still be riding on the Telco pipes, which would further re-inforce dumb pipe syndrome. This deal is just another blow to the traditional telcos, pushing them further towards commoditization and being a pipe. How will they fight back? Is their future only in providing the connection? This will be interesting.

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Impact Analysis: Google buys out Moto (Part III- Impact on the present day partners and eco-system)

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 17, 2011

Read Part I and Part II

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/ Impact on OEM partners
4. Impact on Telcos

Eco-system view/ Impact on OEM partners

Google says they will continue to run Motorola as a separate business. Again, given its size, that’s about all they can do. Google also says that this will not change their commitment to Android being “open” and to their other OEM partners. Another compelling argument in favour of the Google-Moto deal is that, this is a strategic buy for Google in order to exert more control over the Android eco-system. Google says they will continue to run Motorola as a separate business. Again, given its size, that’s about all they can do. Google also says that this will not change their commitment to Android being “open” and to their other OEM partners. Many including myself, however, believe that it will not be very practical and possible to keep the Android “open” and as impartial given the $12.5 investment in Moto. Beneath all the sweet talk with the other partners, all the larger partners of the eco-system are disingenuous with their positive statements and sentiments. Carrots rarely work in the “open” Android eco-system. With Motorola in their back pocket, Google now has another stick to use when the carrots don’t work: Control on the Google device. With Moto, Google has the capability and competence in devices, which in turn is pretty handy to apply to pressure the other OEMs to force them to do better work.

What this means for the other significant partners of the Android eco-system: Samsung, Sony-Ericsson and HTC. There are two points on that
1. The OEMs were not dumb not to have anticipated this move. Thus Samsung moved into making the Bada.
2. The World of OEMs would now split into Loyalists (Moto for Android, Nokia for Microsoft) and the multi-platform vendors (Samsung, HTC, SE). This move could drive some of those OEMs to give a second look at Windows Phone as Android alternatives. Microsoft will have to deliver a truly competitive consumer mobile operating system to take advantage of this opportunity and chip away a few of the big OEMs from the Android camp.

With the loyalists (Samsung, SE and HTC) now moving into frienemy space, Android may loose some momentum in the numbers that it kept on pilling for sometime now. The decider or qualifier for Android’s success will be the pace of Android’s extension across multiple other platforms, eco-systems and device categories. For instance, Google TV will necessarily have to fire to keep the Android registers ringing… V2V systems will be another decider in terms of number of Android activations. The trade-off that Android will have is its capability to extend across platforms versus the rate at which its partners desert it.

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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