The news this week that Google is set to buy Motorola Mobility raised a few eyebrows in the industry. The primary issue is that, in one fell swoop, Google has committed to a transaction that is both beneficial, and potentially detrimental, to its Android partners.
It is perhaps telling that the first couple of questions raised on the acquisition conference call were related to patents. It is well documented that Google feels the need to strengthen its hand in this area, while as a recognised telecoms pioneer Motorola has a broad set of intellectual property covering both core technologies and value-added enhancements. In a low key way, David Drummond, SVP and chief legal officer at Google, described Motorola’s patents as “a good thing,” although he would not be drawn on how their acquisition would alter Google’s legal strategy.
The search giant published canned quotes from a number of its partners in the Android ecosystem – HTC, Sony Ericsson, LG Electronics and Samsung – referencing “Google’s commitment to defending Android and its partners.” So far, while a number of Android lawsuits are active, Google has shown little evidence of standing up for Android licensees, probably due to the fact that in patent terms it has a relatively weak hand.
In a blog post, Larry Page, CEO of Google, made reference to “companies including Microsoft and Apple…banding together in anti-competitive patent attacks on Android.” Google has used this argument before, accusing its rivals of a “hostile, organised” campaign against Android. Following on, Page said that: “our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.”
But the big challenge Google will face will be convincing its other handset manufacturer partners that their relationships will not change now that the platform provider owns one of their rivals. The Android sector is already hugely competitive, what with Samsung, LG Electronics, HTC and Sony Ericsson all placing the platform at the centre of their smartphone strategies. With this in mind, if it is perceived that the playing field is now less even, vendors may opt to reassess their platform commitments – even if currently it is unclear where the real alternative to Android would come from.
It is worth remembering that in the mobile space, few companies have managed to successfully run their own handset businesses while also licensing their platforms to third parties. Symbian OS was at its most successful in terms of multi-vendor support when it was licensed by an independent commercial entity – although even then, there were question marks over the influence exerted by Nokia. Palm went so far as to spin-out its OS arm, in order to make Palm OS more appealing to other vendors, with limited success. While it has been suggested that HP may be open to licensing webOS, as yet there have been no takers.
The problem comes if (or when) Google starts showing a preference to Motorola with the release of new Android platforms or features. If the recovering handset vendor is able to consistently offer the most advanced Android handsets because of its new ownership, rivals who compete aggressively at the high end – notably Samsung and HTC – are likely to feel handicapped.
On the acquisition conference call, Andy Rubin, Google’s SVP of Mobile, said that the intention is to continue to use the same processes when selecting partners for flagship Android devices, in the way it has worked with HTC, Samsung and Motorola in the past. But undoubtedly these companies will be keeping a close eye on the way the relationship between Motorola and Google develops.
In this regard, Samsung’s broad platform support may have some advantages. It can transition its mid-tier devices toward its own bada platform, which has been quietly building in the background, while it could also opt to offer more high-end devices powered by Microsoft’s Windows Phone 7 – although this is likely to depend on how Microsoft’s relationship with Nokia plays out. HTC, in contrast, does not have an in-house smartphone platform as a fall back, having thrown its weight largely behind Android (again with a limited WP7 engagement).
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