Well played Google, well played. The post-Schmidt giant has been busy competing against Facebook, competing against Facebook again, and now buying their very own mobile handset manufacturing outlet.
“It’s About the Patents!”
Prior to the Motorola Mobility purchase, Google’s weak hand of 701 patents pales in comparison to Microsoft, who was granted 3,121 patents just in 2010. Acutely aware of its vulnerability to patent lawsuits, Google is staffing up on patent lawyers, clerks and legal experts. Just one month ago, Google’s job openings included a number of patent-related positions, including a patent agent, patent counsel, patent docketing clerk, patent litigation counsel, patent paralegal, and a strategic patent licensing and acquisitions manager. So it seems likely the move was focused squarely on shoring up defenses against patent trolls. Afterall, Google stacked up enough legal firepower needed to put up a strong legal defense. Google also recently criticized Microsoft and Apple of trying eviscerate Android with a patent guillotine rather than competing in the market.
Buying Motorola means buying Motorola’s patents, as Google specifically pointed out in its blog post today. You can almost feel the disdain for our absurdly screwed up IP patent system in the writer’s prose:
“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.”
The Android Satellites
While Google has been left untouched, Apple filed a number of rather lame-ass motions targeting Android device makers Samsung and HTC. Even Techcrunch railed against Apple’s actions (shocking!). Oh, and Microsoft also decided to pile up on HTC too. Care to guess whether HTC’s top brass is supportive of Google’s latest acquisition? Let’s see what they have to say about this:
I'm Smiling on the Inside.
“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”
– HTC CEO Peter Chou
Oh I bet you do Peter.
HTC isn’t the only party to take sides: virtually every other handset maker chimed in with either enthusiastic praise, or at least cautious optimism. Regardless, the biggest winners (other than Google) are the smaller satellites in the Android galaxy, who would probably be forced to walk into Microsoft’s waiting arms. The Motorola acquisition is not just lawsuit insurance – it’s market marginalization insurance.
The True Mark of Genius is Turning Disadvantage Into Advantage.
Picture this: you walk into a Verizon store in the future, determined not to buy an iPhone. You have a few choices, here, but it boils down to the Google-Motorola dynamic duo or Windows Mobile on Nokia phone. Ah, yes Nokia; The company which Microsoft invested in earlier this year. They did so to ensure a locked-in downstream mobile handset licensee for Windows Mobile. Nokia, who has a trickle of a market share in the two largest mobile markets in the world.
"Wait they bought Motorola, which means we're stuck with.. aww shit."
I suppose it’s a sweet deal for struggling Nokia, who was quick to go to press today:
“This further reinforces our belief that opportunities for the growth of Nokia’s smartphone business will be greatest with Windows Phone. Additionally, with our respective intellectual property portfolios, Nokia and Microsoft are working together to build and nurture an innovative ecosystem that benefits consumers, operators, developers and other device manufacturers.”
In other words, there are meetings happening in Redmond right now focused on how to make the best of a competitive disadvantage.
The Freedom to Run Android
You know what else Google now owns? 29% of the Android market in the U.S.
That’s a large enough share to drive Samsung and HTC to deliver user experiences consistent with Google’s vision, or else Motorola will. The mobile handset makers are probably wondering if Motorola will enjoy special benefits or access to Google itself. While Motorola is playing down the possibility, it’s likely Motorola will be the reference standard. That means a previously toothless Google couldn’t do much to combat rampant skinning which leads to Android phones with confusing interfaces which look like ass. Google’s primary advantage over the iPhones has been hardware selection. Apple’s competitive advantage over Android has always been the kind of slick user experience only possible with end-to-end control of the product. The Motorola acquisition allows Google, at least on paper, to have it both ways. I wouldn’t be surprised if Google starts making noise about how handset makers should compete on hardware horsepower and quality build, etc. If I were Larry Page, that’s what I would do. That and pick up a shiny new Tesla.
Learning The Lessons of GoogleTV
Earlier in the year, GoogleTV became a casualty of an entertainment industry which withheld critical support for the internet television devices. Google’s management apparently learned from that painful experience that locking down technical talent isn’t enough to come out ahead. It also appears Google is no longer willing to lead its from behind, but rather drive their partners kicking and screaming towards a a better user experience. All it cost was 12 billion. The price appears to be worth it.
