Google put the mobile industry on tilt this week when it announced it’s buying Motorola Mobility. Analysts can’t agree on whether or not the Mac is selling well. And Mac OS Ken’s Ken Ray? He has his soap box out and ready to go.
Googlrola. Moto-oogle. Whatever.
It was one of those weeks when the whole world went topsy-turvy. Suddenly Google owns a bunch of stuff that before it did not: a phone manufacturing business, a set-top box manufacturing business, 17,000 patents with another 7,000 making their way through the US Patent and Trademark Office, and campuses across the country. And all it cost was US$12.5 billion.
Fortune and a million other stories online say that’s how much Google has agreed to pay for Motorola Mobility.
And suddenly I have newfound respect for MotoMobility CEO Sanjay Jha who said — just last week — jeepers we sure would love a great deal with Microsoft like the one Nokia got. Pretty sneaky CEO.
While Google got a whole bunch of stuff with which it may honestly not know what to do — that’s based on the size of the buy and not a comment on Google’s ability to manage — most seem to agree that mostly what Google bought was intellectual property as insurance.
I don’t know if you’ve heard but a lot of the cellphone makers out there are suing a lot of the other cellphone makers out there with a number of watchers saying most, if not all, of those suits are companies going after Google’s Android operating system without going after Google directly.
MotoMobility CEO Jha described his company recently “as having ‘particular strength in 2G and 3G essential, non-essential patents important to the delivery of competitive products in the marketplace, video — particularly compression, decompression and security technologies and finally, a leading position in 4G LTE essential.”
This is a message not lost on Google CEO Larry Page, who wrote of the acquisition on Google’s official blog:
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.
What happens to the ongoing legal battles between Apple and Motorola Mobility in the wake of the Google announcement?
Business as usual.
AppleInsider has Google execs saying Moto will operate as a separate entity under the search-king’s rule. It’ll keep making Android phones, just like it does today, and it’ll keep suing other companies as it sees fit.
Put more officially, Google Chief Legal Officer David Drummond says “[existing] lawsuits will continue and will be managed by Motorola as they are now… I don’t believe there’s anything more to add.”
That means the lawsuit filed by Mr. Moto against Apple last October accusing the company of violating 18 patents covering 3G, GPRS, 802.11 wireless, and antenna design technologies will roll on while Moto will still have to answer on its own to Apple’s countersuit, accusing it of violating six patents related to multi-touch gestures.
Mr. Drummond also addressed the new-to-them patents they were picking up, saying, “We will be in a very good position to protect the Android ecosystem for all of our partners.”
While most of the attention is focused on the intellectual property parts of the buy, it’s not like Google’s gonna close down the handset division. In his blogpost “Supercharging Android: Google to Acquire Motorola Mobility,” Google CEO Page notes:
In 2008, Motorola bet big on Android as the sole operating system across all of its smartphone devices. It was a smart bet and we’re thrilled at the success they’ve achieved so far. We believe that their mobile business is on an upward trajectory and poised for explosive growth.
Motorola is also a market leader in the home devices and video solutions business. With the transition to Internet Protocol, we are excited to work together with Motorola and the industry to support our partners and cooperate with them to accelerate innovation in this space.
Page says, sure we’ve got our own manufacturing arm now, but that should’t freak out the HTCs and Samsungs of the planet. “This acquisition,” he says, “will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open.”
That should make other Android device makers more comfortable… but will it?
While Google says it’ll let it’s new purchase run as a separate business and that other licensees will not be affected CNET points out that Google, through its Motorola Mobility acquisition, will be both partnered with and competing against every other Android device-maker out there. That’s phones, tablets, and some of those home appliances.
Gartner analyst Michael Gartenberg says, “Any way [Google] tries to couch this, there’s no doubt Motorola is the most favored player. If I’m a third-party vendor, I have some real concerns here.”
Seeming to pick up where Gartenberg leaves off is Nick Dillon, an analyst at Ovum, who says, “If, for example, Google provides preferential access to the Android code to its own hardware division, this would place other vendors at a disadvantage and may lead them to question their commitment to the platform.”
Not that partners aren’t saying anything bad about the acquisition out loud. HTC CEO Peter Chou says his firm welcomes the news of the Motorola acquisition, “which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem…” sentiments similar to those expressed by Samsung, LG, and Sony Ericsson.
At the same time, can former Apple manufacturing engineer, Danger co-founder, Android co-founder and current Google senior VP Andy Rubin keep his hands off the gadgets? He made the SideKick for cryin’ out loud — a totally awesome phone until the iPhone hit. Rubin says the Nexus project will remain open. That doesn’t mean it’s not Motorola’s turn, though. The Nexus One was made by HTC, the Nexus S was made by Samsung, and if Moto makes the next one what will people think?
And here’s an interesting thought, phrased in question form: Will Google’s new buy fragment the Android ecosystem even further?
Gartner’s Gartenberg thinks vendors other than Motorola Mobility “will have to work harder to differentiate,” and will likely “double down on customization.”
Well that should go well for the developer community.
One Big, Happy, Family
Android partners such as HTC, Samsung, LG, and Sony Ericsson had said “yay” about the whole Gotoroogle mash-up, whether they meant it or not, and now AllThingsD has one carrier saying “yay,” as well.
Yves Maitre, a Senior Vice President with France Telecom’s Orange says the tie-up is “great news,” and that it’ll offer decent competition for Apple. Yes, sadly there is no competition for the iPhone currently, you know, except for all of those Android phones making up more in sales each quarter worldwide than Apple is able to sell.
Maitre says the Google buy adds a sort of vertical integration absent from the Android space currently, leaving me to wonder whether he realizes that his company sells the iPhone.
In other news my right hand wants to beat the crap out of my left hand.
Hopeful about the Google/Moto tie-up in a different way is Verizon deputy general counsel John Thorne. Electronista has Thorne saying that he hopes the acquisition will bring to an end the seemingly endless patent battles.
“At first glance,” says Thorne, “to the extent that this deal might bring some stability to the ongoing smartphone patent disputes, that would be a welcome development.”
Verizon’s pretty much hoping for a draw, since it makes a lot of money selling iPhones — and a lot of money selling Androids.
Power to the Patents
Which seems more likely to you: that Google buying Motorola Mobility would make Apple want to buy more patents, or that Google buying Motorola Mobility would make Samsung want to buy more patents?
Electronista has Korean news service Yonhap saying Samsung, which is up to its iChing in lawsuits with Apple, is worried about Google’s Motorola buy. Particularly that it might “put more control back in the hands of the OS maker.”
And that, according to Yonhap, has the Korean electronics maker thinking maybe it should buy some other companies to strengthen its software position.
This is not Yonhap guessing. They say they got this from leaked minutes of an emergency corporate meeting held by Samsung chair Lee Kun-hee, who reportedly said, “We must pay attention to the fact that IT power is moving away from hardware companies such as Samsung to software companies.”
What are the gonna buy, MeeGo?
Everybody wants to go vertical. Leaked info from a private meeting, that publicly Samsung has given Motoroogle a big thumbs up, though Electronista says many “have noticed the boilerplate nature of its official statement and suggest that Google goaded the companies into saying something positive about a deal they may privately resent.”
The Mac is Popular. Or Not.
Time for another edition of same planet/different worlds where we see the Mac going gangbusters in Asia, where we see Apple as the only computer maker showing growth in Europe, and where we see a sudden slowdown in Mac sales.
That’s last one’s from the “different worlds” file.
First, AllThingsD has Needham and Company analyst Charlie Wolf issuing a research note this week, wherein he notes that the June quarter marked the 21st consecutive quarter that Mac growth beat growth for the PC market as a whole. Asia was a huge part of that, with the Mac seeing growth of 67.6 percent, thanks to increasing demand in China.
By Wolf’s estimation, Asia accounted for just over 55-percent of the Mac’s worldwide growth year-over-year. Quoting the Wolf: “The growth of Apple’s sales in China represents a perfect storm between an iconic brand and a rapidly growing middle class that’s more brand conscious than consumers in virtually every other region of the globe.”
Over now to Western Europe and… France. Not sure why we’re dividing those, but okay.
Electronista has a look a new numbers from Gartner, which show Apple playing the part of the number five computer vendor in the region — or regions — with sales growth in both areas. The Mac currently controls 7 percent of the computer market in western Europe, up from 5.6 percent for the same quarter a year earlier, and 5.8 percent in France, up from last year’s 4.5-percent.
While those percentages were enough to grab the fifth spot in both regions, Apple was also the only computer vendor in each top five list to see its share grow.
Growth in Asia, growth in Western Europe and France, 21 consecutive quarters of growth worldwide, word from UBS analyst Maynard Um that back-to-school sales are up for computers in general and the Mac in particular, and yet there’s this one analyst saying Mac sales have suddenly fallen off a cliff.
AppleInsider has Global Equities Research analyst Trip Chowdhry saying that last weekend “was probably one of the slowest weekends for Mac sales” in the current calendar year.” This, he says, was based on proprietary research covering “various tracking data,” though further down the page, the story says Chowdry surveyed four university book stores… and talked to an undisclosed number of parents.
How many millions of dollars does this guy influence?
The four universities reportedly revealed a “significant” drop in Mac sales over the last three weeks, though bookstore workers said they were “optimistic” that sales would increase when school reopened.
So there are no students there right now to buy Macs? Gee, you don’t think some of those kids are buying Macs before they go back to school, do ya?
As for the parents to whom he spoke — maybe three, maybe five, we don’t know — they reportedly said Apple’s back-to-school promotion of a $100 App Store gift card was not enough, and that they’d rather get a hundred dollars cash back on education pricing.
Somewhere in there Chowdhry also figures that Mac sales have been damaged by high gas prices, which have “made consumers more price sensitive.”
My head hurts now. I want to go lie down.