Google-Motorola deal raises many questions

Google’s decision to buy Motorola Mobility Holdings for $12.5 billion gives the search giant a more significant direct involvement in the design and production of mobile phone hardware and shores up a valuable intellectual property portfolio during a time when legal maneuvering through patent holdings is plaguing the Android market.

Most of the industry analysts hailed the deal. However, there are several question marks. Will Google continue to lead the OS market with the Android platform?

A number of repercussions will result from this acquisition if it goes through. The Android platform is on its way to becoming the eventual leading OS in the smartphone market due to its wide OEM support. Does the growing support change for Android now that Google will be in direct competition with its licensees?

Will the likes of Samsung, Huawei or even HTC adjust their strategies by emphasizing a competing platform? How will it affect Android future development? Android innovation relies on the contributions of its licensees, does it all freeze while this settles and how well can RIM and HP capitalize on this opportunity?

Google has been relatively silent through the many legal problems its licensees have faced in defending Android,” says Kevin Burden, vice president and practice director, mobile networks, ABI Research. All its licensees are now feeling their legal positions have just been reloaded, but their allegiance to Android may be more at risk.”

Beyond mobile phones and media tablets, Motorola Mobility has a healthy business in the digital home, namely broadband cable modems and set-top boxes. Its strategy has been to promote a TV everywhere” solution. Google, in contrast, had its foray into this space with Google TV seen widely as an experiment. A tie-up between Google and Motorola could give Google the expertise it needs to be taken seriously and gain an eventual foothold in content deliver to the home.

According to Consumer Watchdog, does the Google-Motorola deal pose anti-competitive danger?

What if Google, the master of the cloud computing universe and the Internet’s information monopolist, were to buy Intel, Apple, or IBM? Would we want the company that controls information outside of our computers all along the Internet to also have control over a principal computer hardware maker and its patents?

Anti-trust regulators looking at Google’s proposed takeover of Motorola Mobility might ask themselves the same type of question. Do you want the mobile phone information monopolist (through its Android operating system and apps) to own a principle mobile manufacturer and its patent technology?

To be sure, monopolies look different in the Internet age. But what Google has over all of us is the world’s largest repository of private information ever assembled because it tracks every web site we visit and every search we make. Mobile technology allows Google to follow our physical movements through Android, Maps and Latitude, as well as our mobile behavior, images we compile on our mobile phone, and soon the faces of people we photograph.

Should an information monopolist like Google have the power to dominate cell phone manufacturing and control patents that could require mobile phones to use its information-tracking Android operations and applications, according to Jamie Court, president and CEO of Consumer Watchdog.

More than 70 percent of consumers agreed that apps would be extremely important when purchasing their next handset and now Google can rival Apple’s app ecosystem, according to the new Strategy Analytics report, Googlorola: Good News or Bad News for Developers and the Android Market?”

Apple built the iOS ecosystem on the strength of developing hardware and software that worked in conjunction. Apple’s development paradigm led to innovative apps and a platform that focuses more on experience than technical specifications.

Though Google innovated consistently with the Android platform, it has failed to effectively tie software upgrades to new hardware which developers could leverage in order to create new compelling apps.

While other factors certainly played a critical role in the selection of Motorola as an acquisition target, Google will be able to leverage the purchase of Motorola to address three critical flaws with Android:

·               –  A subpar ecosystem for consumers and developers

·               –  APIs that are not specifically focused on improving usability

        –  Fragmentation

Providing developers with an environment in which they can succeed will be critical to building long-term support – support which is essential to consumer interest. If handled correctly, the acquisition of Motorola – could help Google make Android into a platform that offers unrivaled revenue opportunities. But this acquisition is not without risk,” said Josh Martin, director of Apps Research at Strategy Analytics.

By Team
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