Google buys Motorola for $12.5B
Android, DLP News, Google
The Android platform has just reshaped itself in a day, thanks to a major move made by Google itself. Long structured as an operating system which any vendor could license for free and build hardware to suit it, the nature of Android OS hasn't technically changed in that regard. But whereas all Android hardware makers were considered on de facto equal footing up to now, Android stalwarts like HTC and Samsung are now suddenly on the outside looking in thanks to Google's acquisition of one of their main rivals: Motorola Mobility. Android phones like the Motorola Droid are now Google's official in-house Android products, which can't be good news for Samsung and HTC even as they face crushing legal woes centered around their Android based offerings. And the two don't feel like coincidence, even as Samsung gears up to offer its Galaxy S2.
Apple has never sued Google over Android, despite the fact that it was being secretly developed even as Google CEO Eric Schmidt was sitting on Apple's board of directors and had access to Apple's iPhone plans. Bu rather than attacking Google with corporate espionage claims, Apple has instead opted to sue various Android hardware manufacturers like HTC and Samsung whose products often look so much like an iPad or iPhone from more than a few feet away with the screen turned off that Apple alleges the Android manufacturers are attempting to intentionally confuse consumers into believing that, for instance, the Samsung Galaxy Tab might merely be a Samsung-branded iPad. Apple is winning these patent lawsuits in a blowout, and the rulings are bringing the future of the Android manufacturers into question, with stock buybacks and such already in place to try to stop the financial freefall. How much of Apple's motivation comes from revenge aimed at Google, and how much of it is the mere fact that products like the Galaxy Tab look like stunning iPad ripoffs, is unclear. But what is clear is that the patent wars are working. And now Google has made a move which appears to be a pre-emptive defensive one…
HTC, Samsung, and other Android hardware manufacturers must have already been weighing the merits of simply dumping their Android OS based products altogether in order to get Apple to drop the legal action. Rather than sit around and wait for that shoe to drop, Google has instead acquired one of the few Android vendors which isn't currently being sued by Apple. If Apple had been planning to sue Motorola over its Android hardware, Google's message is now clear: you'll have to sue us instead. But more centrally, Google is now less vulnerable to third party Android manufacturers pulling out of the market over legal woes. The flipside, of course, is that today's move may make HTC and Samsung more likely to opt to bail out…
Hardware vendors chose Android as their OS because it was free, it was open, and that made their lives easy in their attempts to come up with hardware products to throw against products like the iPhone and iPad. The fact that the vendors were technically competing against Google's own in-house Nexus based Android phones didn't really matter because the Nexus never really mattered, as it never sold well. But now that Motorola Mobility's stable of Android based phones and tablets have become in-house Google products, that changes the landscape significantly. Even as Samsung gears up to launch the Galaxy S2, it'll have to do so knowing that it's a third party Android product which will have to compete with the now Google-owned Verizon Droid lineup. Will the carriers be more likely to push the Droid than the Galaxy S2 because Google says so? Will the Droid now receive Android software updates in a preferential manner? Will Google now begin optimizing Android specifically to run best on its own Android-based products, as Apple currently does with its operating system? These are the questions Samsung and HTC must be asking themselves today as their heads spin from the news.
Interestingly enough, the "Google buys Motorola" move leaves the Android platform far more similar to the iPhone/iPad platform in one respect: instead of Google trying to get Android on as many phones and tablets as possible so as to whitewash the market with Android based products, its strategy is now centered around an in-house line of official Android products running its in-house OS. It's the strategy Apple has been using with the iPhone since 2007, as its iOS operating system is optimized solely to run on the iPhone, iPad, and iPod touch. Now, with a chunk of Android phones coming under Google's ownership and the rest of the Android manufacturers on the suddenly unenviable outside looking in, the question is whether the number of Android based devices on the market begins to sink as Google focuses on its own. The launch of the Samsung Galaxy S2 could be an indicator of what's to come. But shockingly, the S2 could also be the beginning of the end of Samsung's Android era, whether it sells well or not. That's quite the shift based on one swing of the acquisition hammer.
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