Google: Buying Friends And Influencing Handsets

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Google / Motorola Deal Doesn’t Guarantee a “Nexus Droid”

Google’s purchase of Motorola Mobility is, in the end, a mercenary effort to cement Android’s position in the handset ecosystem and to prop up a stalwart proponent of the platform. That’s fine. Google is a big company and it can now pick and choose – and buy – its own friends without input from the peanut gallery. But what does a Googorola merger mean?

First, we must understand that this is not a merger of equals. Motorola split itself in January after years of lagging phone sales. Motorola’s revenue dropped from a high of $10.6 billion to $4.89 billion in Q3 of 2010. They lost half of their portion of the handset market between 2008 and 2009, thus forcing the split from what is now called Motorola Solutions, a company that does everything except make handsets.

Even with the Xoom and the popular Droid series, Motorola was in a bad place. They did, however, have one buddy in their corner: Google. Grima to Motorola’s Théoden, the company whispered the secrets of Android into the ears of Moto engineers and, in the end, they produced some of the best and most popular Android devices on the market. That claim could be argued considering the current crop of devices available, but, for a time, Motorola looked like the company to beat when it came to Android.

But all was not well at Motorola and Samsung and HTC began eating their lunch. They were lurching along, from one promised device to the next, and in the end it looked like they may be an also-ran… until today.

Motorola is now Google’s skunkworks. They can produce hardware running gold standard builds of Android and, presumably, Motorola Mobility doesn’t need to make a single cent of profit from now until eternity. Google’s rich coffers can pay for R&D, free lunches, and Segways for Motorola’s engineers.

Motorola’s competitors are also pretty happy. They write:

“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.”
- J.K. Shin
President, Samsung, Mobile Communications Division
“I welcome Google‘s commitment to defending Android and its partners.”
- Bert Nordberg
President & CEO, Sony Ericsson
“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”
- Peter Chou
CEO, HTC Corp.
“We welcome Google‘s commitment to defending Android and its partners.”
- Jong-Seok Park, Ph.D
President & CEO, LG Electronics Mobile Communications Company

To be clear, Android needs about as much defending as the Honey Badger although to hear manufacturers (and fanboys) tell it, Android is a delicate flower that requires the utmost care and rabid defense in order to blossom. Google is taking this perception to the bank by buying Motorola in order to become “deeply committed to defending Android.” Why are HTC, Samsung, and LG pleased? Because they know that Motorola is no longer a competitor and they also know that if things get tough they can ask mama Google for a cash infusion.

Google now owns Android “soup to nuts.” But not much will – or can – change. The Nexus line will probably continue unabated and Motorola’s release of future handsets will be slightly curtailed but not halted. Instead, Motorola will be Android’s ambassadors to other engineers, allowing for a sort of safe handset tourism that will ensure that HTC and the like get all the benefits of the platform while still making money. Motorola will let Google show the rest of the world how to make money on Android while, in the process, they make (more) money on Android.

I’m interested, as we all are, to see where Googorola is headed. So don’t think of this as losing a handset manufacturer. Instead, think of this as gaining a Google-sanctioned straw man hardware manufacturer that will, in the end, pull the rest of the Android handsets up to more compelling and exacting standards.