The rollercoaster world of communications and technology is never boring. The latest big deal, in which Google has made an offer to buy Motorola Mobility for the huge sum of US$12.5 billion in cash, underlines this. Eric Schmidt, the previous CEO and now executive chairman of Google, clearly indicated in his Barcelona World Mobile Congress keynote address in 2010 that mobile is where Google sees the future. He assured the industry that Google would put increasing resources into the Android ecosystem, and continue with the optimising of Google for mobility. Coincidentally, at the same event there was much talk of the decline of Motorola as a mobile phone manufacturer. Who would have thought that just over 18 months later Google would make the bold move of actually buying a hardware manufacturer, and that that manufacturer would be Motorola. Motorola has been a pioneer in the mobile space for more than 80 years. Motorola created the world’s first portable cellular phone, amongst other groundbreaking technology based inventions. Motorola’s mobile dominance came to an abrupt end after its best-selling RAZR phone lacked a successor: this was partially due its lack of foresight, and upheavals in the smartphone industry which Nokia had dominated with Symbian, and by Apple’s introduction of the iPhone in 2007. By 2011 Motorola mobility was spun off and reorganised into a separate division, with all mobile products as well as, crucially, all the home IP based video products – two way radio products included. Motorola had already put all its eggs into the Android basket in 2010; this was seen as a major turnaround strategy. Motorola managed, through its production prowess and deep understanding of the mobile market, to launch 23 Android based smartphones globally. As a result, Motorola based Android phones succeeded in taking a huge chunk of new smartphone sales in the USA. The turnaround seems to be working. Ironically, it was probably the above success that motivated Google to approach Motorola with a view to buying the Mobility division. The implications and effects of this acquisition will be long felt in the mobile world. Android has become the fastest growing and in fact the dominant smartphone platform globally. A large number of manufactures, developers, and operators have thrown their weight behind a platform. Android has proven to be innovative and cost effective, as well as an effective competitor to BlackBerry and the iPhone. It may seem that the purchase of Motorola by Google came out of the blue, but there were plenty of warning signs. The first and biggest of these was the increasingly acrimonious patent wars that recently erupted between Apple and Google – not to mention Microsoft and Nokia. At present it is difficult to figure out who is suing who in this industry. As the smartphone market developed and evolved, the big ecosystems from Google, Microsoft, BlackBerry, and Apple were going to war, on all levels. The patent issues were playing out in a big way – and will continue to do so – and the nominally free platform, Android, was the most vulnerable. Google in purchasing Motorola has in one fell swoop rectified a major vulnerability in its armour, which was the patent arena. This was a critical reason – but by no means the only one – for Google to acquire Motorola. The patents that Google will acquire from Motorola cover everything to do with mobile communications, including a patent on the actual mobile phone. In one acquisition, Google will increase its war chest of patents from around 3,000 to over 20,000, putting Google on the same footing in this respect as the other mobile heavyweights such as Nokia. Motorola also has substantial blocking patents around the actual GSM system, which are vital in any mobile ecosystem. These patent assets will prove vital in the defence not only of partners such as HTC, who are being sued currently by Apple, but also for Google and Android itself. Android had been built in part by borrowing heavily from Java, and incorporating lots of nominally free open source GPL licensed code – some of which Microsoft has long contented breached their deep patent portfolio. As an open source platform, Android was particularly vulnerable. It is clear than a real motivation for the purchase was to rectify a shaky and deficient IP strategy on Google’s part which was threatening to undermine five successful years of hard work on Android. Apart from simply buying some insurance in terms of patent rights, Google will also acquire the huge resource of Motorola skills and expertise, thus bringing enormous maturity and depth to the Android team. This will benefit the entire Android ecosystem, and enhance the Android product for all its partners going forward. Of great importance is that the recent Microsoft and Nokia tie-up over Windows Phone 7 had very similar goals. The strength that Google now has in patents also has one final but fundamental implication. Android as a platform is offered free of charge by Google and under an open source licence. Google has realised that fragmentation and lack of standards will ultimately fundamentally threaten the Android business case. Fragmentation and lack of consistency is something that Microsoft learned to its detriment a long time ago, and is also something that Apple deeply understands. The new arrangement will allow Google to extend a type of insurance policy over its product, but will in all probability only offer this to standards and software compliant partners. This level of insurance and security from patent wars will make it untenable for these manufactures to bypass Google certification of their offerings. Certification and standards compliance will immeasurably benefit users of the platform by guaranteeing consistency and software and hardware functionality. Another motivation for the purchase of Motorola by Google is that despite the huge growth of Android globally and in fact the dominance of Android in the smartphone market, Apple remains number one with essentially only one device. Apple has complete control of the ecosystem from hardware to services down to the actual device. The benefit of Apple’s tight integration on the iPhone, iPad, and iTunes is unrivalled user experience and a very clearly defined approach to the market. Google on the other hand is still trying to get OEMs such as HTC to update their early and even some current devices from older and essentially obsolete versions of Android. The effect of this operating system fragmentation is poor support of applications in the market and a very poorly defined user experience. Application developers also lament the complexity of developing for Android due to these factors. Essentially Google has to change its business model substantially, in order to become what has been called an “Experience Licensing” business with the Android platform, as opposed to simply a software vendor. The Motorola acquisition will help them do this. The current rampant growth of Android has been largely as a result of low price commodity devices being sold in huge quantities around the globe. The Motorola experience in North America with the operator based flagship Droid devices has indicated another option. Google needs to offer a top level or Premier style device to the market – partly to counter fragmentation and partly to fight off the Apple and Nokia threats at the high end of the market. Motorola already operates at this end of the market and its experience and operator relationships will help Android and by extension Google immeasurably in this regard. There will be two immediate benefits for Google. The first will be that these Premier devices will allow Google to compete with Apple and Nokia when dealing with the various operators around the globe. These devices will offer cutting edge features not available on other lower end devices and will also be offered exclusively to operators. Apple, Nokia, and other manufacturers such as Samsung, have built very good relationships directly with operators where Google had none. Google’s various licensees, such as HTC and Samsung, owned that particular relationship. Motorola historically has exceptional operator insight and relationships, which it will bring to the party. One other factor that sweetened the deal for Google in the purchase of Motorola was the home video Internet based product. This aspect of Motorola’s business is little known outside of North America but is in fact a significant player in the Video over IP market. Motorola manufactures set top boxes and devices for multiple vendors in the United States. Google on the other hand, through the Google TV initiative, has been trying to popularise its internet TV software platform. Google has not had much traction from hardware vendors so far in this competitive and challenging market. One aspect for this lacklustre performance was the shortage of blockbuster content as well as poorly defined inked DRM and content security. Apple TV, via iTunes and even Amazon, has been playing here with some success. Motorola’s experience and technology will give Google a huge boost in this emerging but significant market. The indications are that the Android platform and the Google TV platform will become one and the same, and this acquisition will have the effect of boosting both businesses. Google now has the ability to control both the hardware and software aspects of the offering and judging by Apple’s success in this regard, that will be no bad thing. The combination of Google and Motorola will fundamentally shift the technology landscape. The most immediate effect will be on the mobile device ecosystem, with cutting edge Motorola based devices coming thick and fast, along with similar products based on Android from other manufacturers. All this at the same time that Microsoft launches with Windows Phone 7 Mango, and Apple, with the iPhone and iOS 5, is charging into the market. Whatever the reasons, the acquisition of Motorola by Google may prove to be a step shift in the technology industry, solidifying the Android ecosystem and making Google a significant and perhaps dominant force in the high tech world we live in. AT The second key benefit to Android will be that Google will be able to lead and essentially dominate the relationship with its licensees and OEM manufacturers, without giving any special privileges or knowledge to any one of them. The Premier high end products will be priced and positioned to allow brief dominance, before the new technology and features trickle down to other companies. One other factor that sweetened the deal for Google in the purchase of Motorola was the home video Internet based product. This aspect of Motorola’s business is little known outside of North America but is in fact a significant player in the Video over IP market. Motorola manufactures set top boxes and devices for multiple vendors in the United States. Google on the other hand, through the Google TV initiative, has been trying to popularise its internet TV software platform. Google has not had much traction from hardware vendors so far in this competitive and challenging market. One aspect for this lacklustre performance was the shortage of blockbuster content as well as poorly defined inked DRM and content security. Apple TV, via iTunes and even Amazon, has been playing here with some success. Motorola’s experience and technology will give Google a huge boost in this emerging but significant market. The indications are that the Android platform and the Google TV platform will become one and the same, and this acquisition will have the effect of boosting both businesses. Google now has the ability to control both the hardware and software aspects of the offering and judging by Apple’s success in this regard, that will be no bad thing. The combination of Google and Motorola will fundamentally shift the technology landscape. The most immediate effect will be on the mobile device ecosystem, with cutting edge Motorola based devices coming thick and fast, along with similar products based on Android from other manufacturers. All this at the same time that Microsoft launches with Windows Phone 7 Mango, and Apple, with the iPhone and iOS 5, is charging into the market. Whatever the reasons, the acquisition of Motorola by Google may prove to be a step shift in the technology industry, solidifying the Android ecosystem and making Google a significant and perhaps dominant force in the high tech world we live in.