You can insure almost anything these days. But in buying Motorola, Google not only purchases peace of mind and a bevy of patent protection: it also gets a hardware platform.
It was only last Friday that we reported on Motorola's
cautionary warning to the rest of the mobile industry that it was sitting on one of the more considerable war chests of patent protections with regard to mobile innovations -- issued in part as a reaction to the rampant tablet legal maneuverings recently involving variously Apple, Samsung and
itself both in
Australia and
abroad.
But while Motorola's position might have been seen widely as a defensive edict (or practically as a notice of intent to start collecting licensing fees from rival Android device manufacturers such as Samsung, LG, HTC and Huawei), to others it indeed served as a compelling enticement: for overnight Google announced it will be acquiring Motorola Mobility to the tune of US$12.5 billion.
As described by Google CEO Larry Page on the company's
official blog, Google believes Motorola's "mobile business is on an upward trajectory and poised for explosive growth" and that the acquisition is designed to "supercharge the Android ecosystem".
In addition to the "supercharge" rhetoric, Page also makes reference to the legal factors behind Google's decision (and perhaps forcing the company's hand): "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".
While it's true that the acquisition of Motorola will help buffer Android against external (and internal) competitor lawsuits, the notion that the acquisition -- of one of the world's most powerful mobile companies by perhaps the world's most powerful company -- will in itself "increase competition" is, shall we say, a nice piece of smokescreen wordplay. Indeed, some commentators online have already indicated that the move will likely draw more heat Google's way from a
regulatory perspective.
What does this mean for other Android manufacturers? There's good and bad news. What's positive for the Samsungs and HTCs is that their primary mobile OS is in a stronger position and they themselves are less likely to encounter additional licensing burdens.
Essentially, despite Motorola's long-lasting affinity with Android (supporting the OS since 2007), it had the stated potential to undermine the overall operating system by demanding licensing fees from rival manufacturers of Android devices. This would have made money for Motorola at the expense of its competitors but as a result made Android itself a less compelling platform to concentrate on due to the significant per-handset cost of manufacturing Android devices (the OS is already beset by licensing claims, including from Microsoft notably). By acquiring Motorola, Google is removing the Motorola threat factor from the Android equation (presumably that's what "supercharging" in the short term means).
However, now Google has a vested interest in the success of one Android device manufacturer above all others. Page's various pledges ("This acquisition will not change our commitment to run Android as an open platform... We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them...") will be viewed warily by Android's other partners. Does anybody really expect the next official Nexus handsets (if that series continues) not to be manufactured by Motorola? And that's just one exclusive deal. How many more perks and particulars are in the offing?
Which leads to the potentially huge upsides for Google and Android as a whole. Aside from all the patent protection now secured (provided the acquisition itself gets through), Google now has the ability to more tightly integrate the Android software platform with its own controlled and branded hardware offerings on both smartphone and tablet. Only one other market-leading mobile operator enjoys such freedoms, and Google, whether it initially wanted to or not, just stepped stridently into that exclusive league.