MotoGoogle

So Google buys Motorola. What does this mean?

Personally I feel this heralds the high-water mark of Android’s OS market share. That’s not the same as its developer mindshare, or customer satisfaction, but I don’t think the other Android vendors are going to be thrilled, and that we’re going to see that in Q1’s sales stats. Android will drop slightly, and one or more new OSs will take its place.

Horace Dediu points to similarities between Symbian’s history and Android’s. Nokia used to be the largest Symbian shareholder, but nonetheless made it an open platform that its competitors could use. However, after initial interest the competitors gradually retreated from the Symbian Foundation because there was a mismatch between Nokia, both licensor and licensee, and themselves, who were only licencees.

Something similar could easily happen to Android. Samsung, HTC, Sony Ericsson, LG, and the rest will view the new combination with suspicion. Even if Google doesn’t give Motorola unfair advantages such as early access to new OS versions, the fact that the platform vendor itself competes with them, and arguably creates a better user experience by tightly integrating hardware and software, will give them pause.

Motorola’s value

Let’s see what the press release has to say.

In 2008, Motorola bet big on Android [...]. It was a smart bet and we’re thrilled at the success they’ve achieved so far.

Funny. Not much success for Motorola. Yes, in the US and Chinese markets, but nowhere else. Currently it’s at 4% of the smartphone market and 9% of the Android market. That’s not huge.

Motorola’s current market share is definitely not the reason Google bought it. It may hope to substantially increase that market share, but that depends on a worldwide strategy, and not just a US/China-based one. That is too narrow a base to become a world player in the mobile business.

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.

No opinion. I don’t doubt that Motorola holds some interesting patents, but I’m not qualified to judge whether the patents are the only reason for acquiring Motorola. See Mary Jo Foley’s take on what this means in the Microsoft vs. Google battle.

However, Google saying it buys Motorola only for its patents would temporarily placate the other Android vendors. So I wouldn’t be surprised if this will become the official line for the time being, regardless of Google’s actual plans.

Integration

Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers everywhere.

Google wants tight integration between hardware and software, just like Apple has. This is not a bad idea at all. One consistent criticism of Android was the relative lack of UX, when compared to iOS.

Besides, it turned out to be difficult to port Android apps from one device to another, partly for reasons of screen size. (I have always seen this problem as one of the fatal flaws of the native app camp: with a good browser and some clever CSS it’s quite easy to work around this.)

Google tried to give Android developers a standard to work against with the Nexus One and S, but that doesn’t seem to have worked — at least, I see little mention of it in the Android blogs. (Incidentally, I feel that the idea that the Nexuses were aimed at consumers is wrong. Developers were the intended target audience all along.)

Other Android vendors

This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.

Don’t worry, dear Android vendors. We still love you.

Fat chance. Samsung will increase the speed with which bada is groomed as an Android competitor. I wouldn’t be surprised if the Galaxy line came to an end — at least, as Android-based devices.

As to the others, they don’t really have an OS ready to roll. Still, HTC may be able to pull through (it said ages ago that it needed its own OS, and I assume something has happened in the mean time), and the cheap Android vendors will continue to churn out cheap Android phones. It’s middle-of-the-road vendors LG and Sony Ericsson that have to make tough choices in a hurry.

MeeGo. webOS. Windows Phone. That’s the choices Android vendors have.

Windows is an obvious candidate, but it has its own problems: Skype (which the operators loathe, so they won’t sell any Windows phones for fear of it being installed), a general feeling that Microsoft doesn’t matter any more, or fear of competition from Nokia. Pick your choice.

So the acquisition could be good news for HP, which holds an important trump with webOS, although it’s clear it doesn’t have the faintest idea how to play that trump by itself. Still, HP is already in licensing discussions with Samsung, and I wouldn’t be surprised if other vendors want to enter the fray, too. Something good might happen with webOS at last, once it’s liberated from companies that don’t understand the mobile market.

Although the Nokia N950 is one slick device that clearly shows MeeGo has potential, it is less finished than webOS. Witness the MeeGo portal, where the main news is that MeeGo 1.2 has been released and supports GSM networks and several others. That’s useful if you want to make mobile phones.

To be honest I have little knowledge of the MeeGo ecosystem. Intel is the main driving force — after Nokia switched to Windows Intel was the only MeeGo founder left. Still, Nokia provided one handset (the N9), presumably because it was contractually obliged to do so.

Still, Intel may be perceived as less of a threat than Google, Microsoft, or HP, which might help some Android vendors to make the switch. I don’t know.

And if it’s neither Windows nor MeeGo nor webOS, you can always branch off your own Android. As far as I know this is still allowed, although Google won’t help you and its updates won’t be suited to your OS any more.

Feeding frenzy?

It’s too early to tell, but it could be that in the wake of this acquisition struggling smartphone vendors (Nokia, RIM, Sony Ericsson) will be bought up by companies wanting to enter the smartphone market before it’s too late.

Tomi Ahonen expects that Nokia will be one target. A Microsoft acquisition has been discussed ever since Nokia announced the Windows Phone deal, and the Motorola deal might be the thing that Microsoft needed in order to start up the process. If they don’t, somebody else might. Horace Dediu pointed out that Nokia’s share price has risen since the news broke — and that’s not because of excitement about the upcoming Windows Phone devices.

In any case, the smartphone wars haven’t stopped yet, and the “inevitability” of Android becoming dominant has received a severe blow. All options are open again, and 2012 will be yet another bloodbath year.

Update: Tomi Ahonen proposes a scenario where Google can both get what it wants from Motorola and placate the other Android vendors.

Google should first cross-pollinate with Motorola for a while, exchange engineers to create the best smartphones possible, and later on spin off Motorola again (minus crucial patents), and eventually sell most of its share. Thus Motorola and Google would get synergy advantages as well as an excellent Android-based smartphone line, and the other vendors would not be quite as afraid of Google as when it kept Motorola to itself.

My only criticism here is that the whole scheme would take about two years, and that is too much time. The other Android vendors are afraid right now, and I don’t think they’d be placated by such a plan. They will still look for an alternative to Android, and by the time Google spins off Motorola the other vendors will already have left Android for greener pastures elsewhere.

This is the blog of Peter-Paul Koch, mobile platform strategist, consultant, and trainer. You can also follow him on Twitter.
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