Each week Ross Rubin contributes Switched On , a column about consumer technology.
Tech company acquisitions often seek to reshape a firm or maybe the overall industry. Buying Applied Semantics catalyzed Google’s rise to web advertising dominance. Apple’s purchase of NeXT transformed the former’s operating system’s roadmap. And HP’s merger with Compaq created a $40 billion powerhouse vendor of Windows PCs.
That isn’t the case for ” Googorola ,” a portmanteau that the sector formerly knew only as an Italian blue cheese often crumbled into steak salads. Indeed, Google’s recent announcement of its intent to obtain Motorola Mobility for $12.5 billion may grow to be the very best profile acquisition aimed ever geared toward maintaining the established order. Presaged by a blog post from Google’s chief legal officer and punctuated by lockstep statements by Motorola’s rival Android licensees praising legal protection, the blog post announcing the purchase promised to “supercharge” Android. However the subsequent Google conference call in regards to the merger reinforced that the “IP” Google seeks to accumulate doesn’t stand for “Incredible Phones.” Google seeks to invigorate Android by way of having the liberty to progress unencumbered along the successful path it already has largely staked out. Among the discussion across the transformative nature of the deal has targeting three key areas of speculation – that Google will use Motorola to create Apple-like vertically integrated superphones, that Motorola’s set-top business would be a pathway to Google’s infiltration of the cable companies, and that the possibility of competing with Google will cause mass migration of licensees to Windows Phone 7. But none of those scenarios tend to come to pass.
Googorola and the Apple model. This “new story” is absolutely an old story for anyone who remembers the primary rumors round the “gPhone.” At the moment, Google noted that it wanted there to be thousands of Google phones. Why? Because, for all of the rising tensions between Apple and Google that Switched On first discussed on the launch of the T-Mobile G1, Microsoft is the Google rival it’s more fascinated with making a universal handset platform via licensing. Apple, in keeping with its Mac and iPad businesses, seeks to win by specializing in a limited, profitable share of the market with a robust user experience with iPhone. Both Google and Microsoft have shown they’re willing to sacrifice their very own handset efforts within the name in their licensed operating systems.
Speaking of the Nexus devices — which were built by other Android licensees — their experience demonstrates the challenges that Google has in seeking to sell its own idealized handsets inside the US Nexus smartphones were available in limited distribution (directly online or exclusively at Best Buy) and feature not been component of carriers’ portfolios. There are a minimum of two factors behind this. First, Google has not desired to compete directly with its licensees (Sound familiar?). Second, it may be difficult to create a “pure” Android experience as some expect Google will need to do with Motorola inside the face of carrier customization demands.
Google is thus hamstrung with Motorola. It desires to keep the division profitable to fulfill financial goals and keep a significant U.S. provider devoted exclusively to Android afloat. However, it can’t offer the device maker an unfair advantage lest it alienate Android licensees and destroy the promise of the Open Handset Alliance .
Next week’s Switched On will have a look at why Google’s ownership of Motorola can be unlikely to bring much disruption to cable or bolster the contest.
Ross Rubin ( @rossrubin ) is executive director of industry analysis for consumer technology at market research and analysis firm The NPD Group . Views expressed in Switched On are his own.
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