Google wants to be Apple as much as Microsoft did. But can Motorola help?
August 15th, 2011
Daniel Eran Dilger
Years after the tech industry unanimously agreed that Microsoft’s licensing model was far superior to Apple’s integrated hardware model, Microsoft began desperate measures to adopt Apple’s. Now Google is trying to do the same. Will buying Motorola help?
Short answer is no
Microsoft’s attempts to copy Apple were nearly as disastrous as Apple’s early 90s attempts to be like Microsoft, proving that just because you set out to do something, doesn’t mean you’ll be able, even if a lot of people believe in you.
It took years of brutal failure to beat this harsh reality into Microsoft. Today, the company is so excited about being able to sell even a video game controller that has sought out Guinness to substantiate its ability sell hardware. My, that’s the sign of a small procreative member.
For all its carping about being open and the virtues of broadly licensed software platforms as opposed to the “closed” integration of Apple (which it likened to North Korea last year), Google is now ready to try some deep hardware integration with a mobile manufacturer it owns.
That’s a strategy that even Microsoft refused to adopt. Recall that during its partnership announcement with Nokia involving Windows Phone 7, Microsoft adamantly denied any interest in buying Nokia, making it clear it didn’t want to get into the hardware business.
This after dumping billions into its Xbox and making a big production about its long term commitment to Zune (something it contracted with Toshiba to actually build). So Google is doing something that even Microsoft has expressed zero interest in ever doing, despite rumors that Microsoft was also interested in bidding for Motorola Mobility’s patent portfolio.
Was it all just for the patents?
One might think that Google simply needed to buy Motorola Mobility for its patent cache. But $12.5 billion is a hysterically expensive purchase for a company that just got done vilifying the practice of bidding the price of patents up into the stratosphere, back when the stratosphere was defined as being around $4 billion. At some point, having thousands of patents runs into the law of diminishing returns.
Further, Motorola’s patents are not really relevant to competing with the iPhone and iPad. Motorola has a patent trove more like Nokia’s, related to core wireless technologies and networking, not smartphone usability. Motorola’s Android business is just over a year old now. Google has had a longer time to patent things related to the modern smartphone business than Motorola has.
Further, Google’s own executives are suggesting that patents weren’t the only reason behind buying Motorola, while also indicating that they were an important component for dealing with the “anti-competitive” competition from Microsoft and Apple.
Of course, it’s hard to say whether Larry Page is lying or bullshitting between all his lies and bullshit. For example, Page stated of Motorola Mobility that “we believe that their mobile business is on an upward trajectory and poised for explosive growth.” Facts indicate otherwise.
When the iPhone appeared in 2007, Motorola was chasing Nokia for second place in the mobile business. It had 18.4% of the mobile market. It then slipped behind Samsung and then LG, and by the end of 2010 was in seventh place behind RIM, Apple and even Sony Ericsson. This isn’t an upward trajectory.
From 2009 through 2010, Motorola lost half of its market share as sales fell from 58.4 million units to 38.5 million. Note that this was the Year of Android when Verizon was heavily promoting Motorola’s Droid phones. The company now faces intense competition from Samsung and HTC, both of which actually make money selling Android phones, while it continues to lose money selling smartphones.
In the first half of 2011, Motorola Mobility lost $137 million. A year prior, the company had lost $132 million over the same time period. That’s not an upward trajectory.
Microsoft suggested that Nokia had promising potential, but didn’t describe its beleaguered partner as having an upward trajectory. By flat out lying about Motorola Mobility, Google is establishing that it is now ready to say anything that sounds good, regardless of how boldly asinine it might be. Motorola Mobility might have some future potential from its Google acquisition, but it clearly does not have an “upward trajectory” using any useful definition of that term.
Fortune’s Seth Weintraub calls Steve Jobs a liar, predicts Android tablets will sell
One reason for Motorola’s failure: Google
Of course, part of the reason Motorola Mobility isn’t doing better is Google itself. Its rushed delivery of Android 3.0 Honeycomb fueled a wild goose chase by Motorola to match Apple’s iPad. At the same time, Motorola also tried to do its own thing in building a convertible phone, showing off the Atrix smartphone this year with a “Lapdock” that supplied an 11.6 inch screen and full keyboard.
While the Xoom was imitative hardware hampered by unfinished software from Google, the Atrix was innovative hardware hampered by severe functional limitations, and once again, the limitations of Android as an OS. After paying $500 for a netbook-like device that requires your separately sold smartphone to have any brain power, all you could actually do with the combination was run Firefox.
Neither the Android powered Atrix nor the Xoom were attractive at all when compared against the far cheaper iPad, which actually had a range of functionality thanks to the vibrant software market Apple created around it. Google simply hasn’t been able to replicate that, despite its efforts to improve upon Apple’s iOS ecosystem by creating a more “open” alternative market for its own platform.
A key aspect of Motorola’s failures this year could be blamed on Google for not holding up its end of the hardware/software codevelopment effort. How does Google’s acquisition of Motorola enhance this partnership? It only limits Motorola from ever escaping beyond the tentacles of Android, much as Nokia could never have left Symbian until its platform caught fire and destroyed everything.
That’s not exactly the same path to success that resulted in Apple. If anything, it’s more like Apple buying NeXT and forcing the Classic Mac OS 7 to run on NeXT’s expensive old hardware, marketed by NeXT and sold through Sears.
My next segment will detail everything wrong about the Google-Motorola acquisition.