This morning’s biggest news headline should be “Apple and Microsoft trembling.” The reason: Google bought Motorola Mobility today for a cool $12.5 billion. It seems that Google made a surprisingly vertical move as they realized that they needed to leverage their popular Android OS in a more focused manner.
What this means now: Google is a device manufacturer - a mobile device manufacturer. They no longer are creating only software; they will now have a hardware division that will create its own incredible mobile technology. The acquisition shows a few things: (1) How important these large companies believe that patents must be owned in order to compete in the mobile industry. The acquisition was definitely a patent protection and acquisition move, since Google was basically the direct target of a recent consortium between Apple, Microsoft, and a few other companies to buy thousands of patents from Nortel Networks. Google knew they needed to act quickly before they somehow were rendered irrelevant due to legal problems. (2) How important penetration in the mobile space has become for companies to thrive in the future. Just a few days ago, Apple was declared the biggest company in the world. Why: the iPhone and iPad. Microsoft has been deemed a rising star again given the exciting prospects of Windows Phone 7. Google’s Android market share has never been higher, so the company concluded that the only way to improve future prospects is to create their own hardware too. Mobile is today. Mobile is tomorrow. It’s exciting to be in this field right now.
What this means in the future: Market analysts are already saying that RIM is in big trouble given their slow movement and clinging to old concepts (I’ll get into this more in another post.) So I think this acquisition will render RIM a non-player. What I’m a bit curious about is how this will affect such manufacturers as Samsung and HTC, who have recently thrived in the mobile business due to their adoption of the open Android OS. Those companies must be angry given that it was their hardware that helped to make Android successful, yet now Google will be in direct competition with them. Talk about feeling a bit used. Don’t be evil, right Google? “Well, Apple and Microsoft started it…”
What this means for consumers: Market analysis shows that we didn’t like the Nexus One. Despite their unsuccessful first attempt, Google will become a major hardware player. The branding of the company will be significant as they have already shown that they know how to create technology in the space that people like. We will get a greater variety of devices, which hopefully will drive prices down. I feel like Apple will probably need to get into an even lower-priced iPhone market so that it can gain some revenue in that sector. Also, I think it means that we will be seeing some pretty cool features on Google phones. Though Google has had its issues with recent experimentation (Wave, Buzz, etc.), it still has some of the brightest and most creative people in the world that are capable of producing revolutionary things. It should be an interesting road.
Aside 1: Google is claiming right now that they will keep Android open to other manufacturers, so we’ll see.
Aside 2: There are probably a lot of talks going on regarding the actual logistics of the deal, so all of this analysis could be completely incorrect.
