This Google-Motorola deal has made me feel very ‘Columbo’.
You’re not supposed to admit this as a hack, but I am struggling to understand the reasons behind Google’s $12.5bn buy of Motorola Mobility (MMI). It “bothers me” in a Peter Falk-way.
There is an embedded systems component to this, but to get to it, we first need to work through some of the higher level stuff from Google’s perspective.
Let’s start with the handset market, I’ve read the statements from Google’s main Android partners and they mostly feel a bit, well, spin doctory, repeating essentially the same sound bite about “defending Android, its partners and the ecosystem”. If you’re looking for a tone word, the diplomatic one is probably “polite”.
You then have to offset those terse words against this press release comment from MMI’s CEO Sanjay Jha. “We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.” (my italics)
If you don’t read that as largely signaling MMI’s ascension as prime influencer over Android’s future development, I’d be interested to know how you do. Sure, the OS is going to remain open but won’t MMI have an inherent edge over other users on knowing what new features and capabilities it will contain and, thus, enjoy a critical time-to-market advantage? In consumer electronics, TTM is everything.
So, might not other handset makers now prefer closer ties to OS providers that don’t compete with them and which they can influence without fear of favor. Steve Ballmer is likely penning a memo mandating “greater-cuddliness-or-else” from the Windows Phone team in Richmond even as I type this. Meanwhile I’ll bet the MeeGo guys are grinning from ear to ear spying an unexpected bounty, Nokia’s involvement there notwithstanding. And let’s not forget that HP now has webOS, which it acquired as part of Palm (edit: except that as of today, HP says it’s discontinuing its work with the OS as part of its decision to exit the smartphone market, although it could still sell that IP elsewhere).
There are other levels. There is the burgeoning tablet market and MMI’s Xoom is a very cool product, but it is still several industrial design steps behind the iPad, and, in that design arena, MMI hasn’t really had a game changer since the RAZR clamphone seven years ago.
There are also set-top boxes to consider, but MMI’s bedrock business is with cable operators rather than in standalone units (which those operators understandably hate because they disintermediate their ability to sell subscriptions). Sure, GoogleTV needs a push but you then come back to the problem of their likely being one primary hardware player in the technology—who else will come on board enthusiastically. And does this mean that the cable business is to be sacrificed, if MMI’s former customers get antsy?
So now we come to Android-in-embedded. You could argue that MMI has little position in this space—indeed, following the latest partitioning of Motorola, it is essentially a consumer electronics business. So, things don’t change, much.
Perhaps the Google-MMI tie-up will see future OS releases go ever more stridently down the consumer path, but even then Google has already left embedded opportunities to emerge rather than directing them. The search giant’s passivity here—a passivity that has indeed allowed many other players to innovate very productively around the Android technology—is not obviously set to change.
However, one question is left hanging, and to be fair, it hangs on a few ‘what ifs’, one in particular. So, what if the deal does lead other handset manufacturers to migrate from Android, regardless of it retaining open source status as they do? Once that process is finished, will Google still disclose the code to all and sundry? Right now, it says it will and we have to take the company at its word. But leaving that code exposed when former users are competing with it (and remembering again Google’s passivity with regard to embedded)…. Well, you can see that there is a potential medium-to-long term issue that needs clarifying.
And ultimately, even if embedded does become a much more significant secondary market for Android, you have to see the MMI acquisition as Google assembling more components to directly challenge Apple. Along with last year’s acquistion of Agnilux, a fabless chip company established by a number of former Apple and PA Semiconductor employees, MMI does round out the head-to-head between the two giants in terms of in-house technologies.
Google’s priorities will have to be directed toward that battle. Apple shipped 47.5M smartphones last year and MMI shipped 13M. There’s still some way to go. Meanwhile, there are also some notes of concern for Android: one analyst recently noted that the OS’ overall market share in the US recently declined for the first time following Verizon’s move into the iPhone market.
My guess is that things should shake out reasonably quickly. That’s the nature of the consumer electronics business. And when they do, Android-in-embedded could be left to carry on as before. Either way, the quicker that process completes itself, the better to resolve any real uncertainties that have now emerged. Because uncertainty and embedded systems have never sat well together.
Edited on August 18th to reflect HP’s decision to abandon its work on webOS.
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