Every year the “quiet” news period, lovingly called “the silly season” by hacks because of all the puff press releases companies try and get them to write while there’s a dearth of “hard news,” gets shorter and shorter. This year, it’s been almost non-existent. However, as I drove to work yesterday, the sky clear and blue, the roads almost empty of other cars, something in my bones told me this was it – the start of a (two-week) silly season. No more hacking scandals, riots, mass murders, and certainly no more big technology company announcements.
Needless to say, I was wrong. At the strange time of 12:30 p.m. BST (7:30 a.m. EDT ) the news broke that Google was purchasing Motorola Mobility for $40 a share – $12.5bn in total. (Incidentally, the purchase amount was set at 63 percent over the stock price, meaning that Google enjoyed a big discount when the Motorola shares collapsed on the back of the company’s bad earnings report.) Here’s my take on what the acquisition might mean:
Apple’s big advantage over Microsoft and Google has been its ability to implement its ideas in both software and hardware simultaneously, as discussed in my recent post on Apple-geddon. It can do this because it owns the industrial design of its hardware. In fact, look at most of Apple’s post-iPhone 1 announcements and you’ll see that they were predominantly successful hardware launches which leveraged existing iOS investment/capability. (In case of pedants, break glass: there’s an argument which says that iOS isn’t really the Apple OS at all, it’s the one that Steve Jobs brought with him when Apple acquired NeXT, and another argument that Jobs took that from Apple “under cover of night” when Sculley fired him the first time ’round.)
On the surface then, the Google-Motorola (Googarola? MotoGoog?) tie-up now gives Google the ability to implement its ideas in software and hardware simultaneously as well. By acquiring a hardware range, Google can produce a head-on competitor to Apple’s products, line by line. Whether they can do that effectively is up for argument. They probably can’t out-innovate Apple – they may think they can, but the evidence is – they can’t. Given the opportunity to innovate, Google regularly comes out with products that only a mother could love, and only then if the mother in question is a Stanford-educated computer geek who doesn’t get out very often at all, and whose role model is Sheldon from the Big Bang Theory.
Thinking purely in hardware terms, Motorola’s last successful phone was the RAZR, which wasn’t a smartphone at all. Will Google be looking to build on a feature-phone base? If yes, there’s no evidence it’s a winning strategy – Apple hasn’t gotten where it is today by building on feature phones – it got there by putting computers into consumer-product-phone-shaped packages.
Perhaps Google needs Motorola for their hardware component library? Maybe. But if 25 percent of the components in an iPhone can be made by Samsung, Google could surely have carried on (or restarted) making its own mobile phones without worrying about an installed base.
So what are we left with then? The answer that many are gravitating to, as of this morning, is that MotoGoogorola may be about – patents. If that’s the case, silly season started some time ago, with Google’s decision to use protected source code as the basis for Android.
Tags: acquisition, Google, Intermittent Signal, Mark Watson, Motorola
