Google & Motorola - Chinese Whispers and Puzzles
Even before the deal is finalized the Wall Street Journal is speculating that Google will sell Motorola Mobility (MMI) to Huawei and keep just the patents because it doesn’t want to disrupt the Android ecosystem. The analysts IDC commented that since “Google doesn’t have a hardware background”, they don’t know what to do with Motorola.
The reality is more complex than either of these speculations. In acquiring the patent portfolio, Google is astute enough to realize that in the converged technology world, strong hardware and software combination patents are vital. Equally, they understand that this capability needs to be maintained in order to protect the ecosystem going forward, thus acquiring the means to do this. Now it just has to be creatively integrated into the organization in such a way that everyone sees the overriding future benefits.
When looking at Google’s major operating system competitors, Apple has both the hardware and software capability but completely integrated into a closed system; Microsoft with Nokia has an integrated approach as well, even though they are touting an open system. The requirement for hardware and software is without doubt paramount for the future.
Devices beyond smartphones need to be created in order to achieve Eric Schmidt’s (Chairman of Google) objective of connecting the world. While Android in smartphones is growing rapidly, Apple still dominates the tablet space. Concepts such as Google Wallet and Google Glass will need help transferring into the world of commercial production. The acquisition of MMI provides Google with a mechanism for rapidly commercializing technology concepts into simple to use devices.
Does MMI have too many phone design teams and engineering resources for this scenario? The answer is “probably”. Could elements of this be offloaded and would Huawei be a logical acquirer? The answer is “possibly”. However, the core capability will be retained within Google in order to enable the enhanced technology future that Larry Page, Sergey Brin (co-founders of Google) and Eric Schmidt foresee for the world. This future includes enabling mesh type communications for the emerging world, facilitating the digital living room and creating the autonomous automobile. None of these will be successful without the opportunity and means to integrate hardware, software and creative vision. This is the capability that Google has acquired with MMI.