Google + Motorola Mobility
Okay. Unless you have been kipnaped and gone off the grid in the last week, you have heard about what likely will be considered the deal of the year, Google buying Motorola Mobility (MMI) for $12.5bn.
The most obvious reason is that Google is in serious need of strong patents and in great multitude in order to protect the Android ecosystem that it has built in the past few years after failing to secure the Nortel IP portfolio.
Fear, aspiration, and other reactions
Having the patents from the granddaddy of the mobile handset, Motorola, puts Google in a much better/equal footing with the likes of Apple and Microsoft/Nokia as far as the on-going proxy war in Smartphones are concerned. On one hand, this could potentially re-enforce the alligance of Android makers such as HTC and Samsung to the eco-ystem by minimizing uncertainties for the long term (the existing legal actions between Apple and these markers still need to be played out, but the outcome is likely to be more favorable to Android makers if Google gets involved in a multi-party licensing arrangement.)
On the other hand, by becoming the owner of a handset maker, Google has to maintain the tricky balancing act of ensuring that there is no hint of favorism with Motorola. For now, Android handset makers have expressed support for the acquisition, although, as the saying goes, the proof is in the pudding - we shall see what happens in the next 6-12 months. There has also been alternative scenario proposed suggesting that given the proliferation of Android handsets (300+ as of latest count), Google could be in a position to use Motorola to create reference designs for the whole eco-system so that the end user can get the maximum benefit of Android phone through streamlined design/production. Honestly though, it is hard to see how Google can do this with Motorola in its present form unless it plans to trim MMI down to an expensive hardware lab.
An area that is worth thinking about is how do the telco think about this. While iPhone has been a boom for the likes of AT&T, the consensus is that Apple is capturing most of the profit and accolade while the operators are stuck with footing the bills for massive capital expenditure and handling user complaints. So, what does the creation of another Apple-like 800 pound gorilla in GOOG/MMI mean? So far, the reaction has been very muted.
How about consumers? There was a fun naming competition at WSJ for the rest of us where the readers get to vote for a name for the transaction. The winner is Googorola - the people have spoken. Beyond the thrill of instant veiwer particilation, there was a suggestion that Google will offer free smartphone as an extension of its multi-side platform business model. Since, unlike software which is virtually free once written, hardware comes with a BOM (bill of materials) for each unit, not sure if that would ever happen with the current ecosystem. On the other hand, if you extend the scenario to the model of fab-less IC design houses, it may be a good time to think about who will be, or indeed think about starting, the next TSMC for handsets.
Did you know - a few loose ends
Finally, on the patent front, given Apple's aggressive legal actions, it is interesting to note that Palm (HP, for now) is the only company that Apple has not gone after. Both Apple and Microsoft are siting on a big pile of cash right now. (I am just saying.)
On the smartphone technology front, it is probably worth noting that Mozilla is starting a project to build a smartphone browser that aims to do to smartphone ecosystem what its FireFox (internet browser) has done to the PC ecosystem by rendering Microsoft's operating system playing second fiddle as users migrate to Cloud Computing. Given the success of Mozilla and Firefox, this is a highly credible project. However, with the on-going battle between iOS and Android instead of a dominant platform like Microsoft Windows, this vision may take a while.
* Google buying MMI: http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html
* Android Partner quotes: http://www.google.com/press/motorola/quotes/
* Google taking charge of Android Ecosystems: http://www.lightreading.com/blog.asp?blog_sectionid=217&doc_id=211132&f_src=lrdailynewsletter
* Telco and other poentail losers of the GOOG/MMI deal: http://www.fiercewireless.com/story/who-are-losers-googles-125b-acquisition-motorola/2011-08-16?utm_medium=nl&utm_source=internal
* France Telecom "Like" GOOG/MMI: http://allthingsd.com/20110815/u-s-carriers-silent-on-motoroogle-but-france-telecom-gives-it-a-thumbs-up/?mod=mailchimp
* Verizon hoping for peace on the patent war front: http://www.fiercewireless.com/story/verizon-hopes-google-motorola-deal-will-cool-patent-wars/2011-08-17?utm_medium=nl&utm_source=internal
* Does this mean I can get a smartphone for free from Google now? http://www.xconomy.com/san-francisco/2011/08/17/are-free-motorola-phones-in-our-future-a-vc%E2%80%99s-take-on-why-google-is-buying-motorola/
* Readers have spoken, Googorola it is: http://allthingsd.com/20110817/googorola-triumphs-in-snarky-nickname-poll-over-12-5b-bid/?mod=mailchimp
* Apple may fear Palm's (HP) patents the most: http://allthingsd.com/20110819/could-hp-turn-a-profit-on-palms-patents/?mod=mailchimp
* Mozilla/Firefox's Plan B: http://www.technologyreview.com/web/38308/?nlid=nldly&nld=2011-08-15
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