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Google buys Motorola Mobility: What does this mean?

By: , 8/15/2011 10:46 am | 36 comments

Wow, big news today on the mobile front. Google announced that they have offered 12.5 billion dollars for the makers of the Razr. I dunno…seems like a lot of money for a company that makes some old phones. Does anyone really buy those things anymore?

*Editor whispers in David’s ear*

This just in…Motorola makes the DROID phones nowadays. Well that makes a lot more sense…

In all seriousness, this is a pretty big departure from Google’s typical MO. They are getting into the hardware business in a big way. The Droid phones pretty much launched Android into the powerhouse it is today and now Google will be the brand behind it.

According to Google they will be keeping Motorola Mobility a separate business unit and nothing else will be changing. Yeah….ok…who believes that? On the call about the acquisition, Google went so far as to say that Motorola will be allowed to bid in the process to make the annual Google phone (G1, Nexus, Nexus S), but other manufacturers will be able to bid as well. Really? You don’t think Motorola is gonna win those? Shouldn’t it? I mean really…it is Google’s company now, shouldn’t they let their company build their phone?

The bigger question is, what about Samsung and the other bajillion manufacturers that make Android devices? Google, of course, says nothing changes…Android is open and magical. Again, who believes that?

In the fragmented world of Android it is always best to have the latest and greatest version when the device launches because who knows when you will get the update. If a phone comes out with 2.2 and 2.3 is available, then it looks dated. Does anyone really think that the Motorola devices won’t get the best version possible and have the fastest upgrade schedule of all manufacturers? Of course they will…

Will that hurt other manufacturers? Yes and no…

Tech savvy customers will probably go with Motorola devices because they will know that Google is behind them and understand what advantages that entails, but realistically that isn’t a huge group of people. The average joes will still pick up devices for the same reason they always have…price, looks, functions, and advertising. So in the end, it probably isn’t going to be a huge difference if the other companies keep doing what they do.

However, I do think that this puts the other manufacturers on notice. Google now isn’t the “hands off” referee of Android that they have been until now. They are actively getting into the hardware game, and if you are a hardware manufacturer (including HP and Apple), then they just got your attention.

What are your thoughts? Do you think this will dramatically impact Android in the long term? What does it mean for HP?

Source and Image Credit: This is my next…

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About David Baxter

David is the founder and Editor-in-Chief of webOSroundup. When not toiling away at WOR he is usually with his family, at church, building a website of some kind or another, or playing a video game. @davidbbaxter
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  • http://irresistibledisgrace.wordpress.com Andrew S

    If Google bought Motorola just for patents, then it could make sense that it would be leaving the rest of the company’s operations untouched.

    But I can’t help but think that 12.5 Bn for patents might give Google a sense of ownership of the rest of the contents of the Motorola cookie jar.

  • http://twitter.com/confusedgeek Felipe Garcia

    unless HP starts to license and then gets out of the phone making business (leaving it to others) then it doesnt affect them.

  • MikeW

    There’s not gonna be much of a change. HP needs to get more phones out to all carriers or contract webos to other manufactors of phones like samsung or HTC. I think Android going to succeed no matter what they did. Webos forever.

  • http://twitter.com/MrKal_El Mr Kal-El

    While I agree w/ you that regular consumers are dumb ;) … When Google starts edging out their “partners” for specs, advertising & esp. SW updates… even the dumbsumers will notice….

    Samsung & LG will ultimately be fine…but HTC? Maybe Beats will be a bigger cash cow for them… ;)

  • http://twitter.com/EdCates Ed Cates

    HP will now buy HTC, getting their own in-house phone design/manufacture expertise AND clearing up the “Beats for Phones” question once and for all.

    ;-)

    • Jemojc

      I like that… It sounds like unicorns!

      • MikeW

        +1

        • Malette

          Might be the best move now.

    • http://www.briandeyo.blogspot.com Brian Deyo

      That would be a close to 50 billion dollar acquisition. If you take the current conversion rate, HTC market cap, and a 2x multiplier like Goog paid for Moto. 

      Sorry but that isn’t going to happen. The best bet for HP is that this really frustrates makers like HTC and Samsung and they go looking for another platform other than Android and Windows Phone 7. 

      Honestly, the only hope HP has at licensing is with a new partner like Amazon or maybe someone like Sony. There aren’t any small players left. Palm and Motorola were the only ones left. They might be able to buy RIM, but that wouldn’t make a great deal of sense.At this point the smartphone market is the place for the big boys – Apple, Google, Samsung, HP, Microsoft, LG, HTC, etc.

      If HP is serious about competing they need to start poaching engineers from Apple and Motorola and RIM. HP has demonstrated with the Veer, Touchpad, and Laptops that they don’t know how to make hardware. That was the one reason Rahul Sood gave for leaving HP. He said they don’t have the tooling and engineering to make great hardware. His Voodoo stuff was years ahead of its time and that translated to the Envy line which is good, but no where near Apple. I have an Envy 14 and it just stinks in comparison to a new MB. They can’t just treat this market like the mass market of commodity laptops. Not yet. Not until phones are so thin, powerful, and battery efficient that packaging just doesn’t matter anymore. We’re not there yet and I think the key device for HP will be the slab phone if they ever produce it. If they can have a hit slab phone and have a Veer, Pre3, Slab 4, TP 7, and TP 9 all on At&t, they may be able to pull off what Goog and Moto did with the original Droid on Verizon. 

  • PalmOn

    The big new of today on this web site should be the arrival or lack of arrival of the reported mystery webos slab device reported as rumor and arriving today at Sprint. How about it webos roundup staff?

    • JDM

      Hehe, you make this site fun.

    • Prebob

      Get a life.

    • JDM

      Awwwww, bummer…. :( No slab phone….

  • Rterry

    Spells more trouble for HP.

    • JDM

      No way. If Android takes their paws off all other manufacturers, that means that HP can license to those other carriers (or just one)!

      • Sales

        speaking of spelling….it’s “sense”

  • http://profiles.google.com/anayagamingllc Jason Buffalo

    This buy is the result of Google not able to get a Patent deal from a previous Auction, Google right now is in a very bad position due to lack of Patents that Google needs to protect it’s Android OS, Motorola was in the Mobile Business for some time and have a good patent Portfolio that Google can use to way off Microsoft and Apple, what are now pretty much chasing after any Android phone Maker there is for Patent Violation, it will cost Google a good chunk but it’s a necessary one for them before all the Patent Litigation make Android to expensive platform to make, so far what it effects us here in WebOS land, absolutely nothing and nothing to worry about.

    • http://twitter.com/TheTechChat TheTechChat

      Yep, I agree. This is a play for patents, I think, a way for Google to get something more than just a patent portfolio. I mean, Motorola is a generally profitable company, and at the very least gives Googl something to stick in their back pocket in case other manufacturers decide to leave Android. They probably had this purchase in mind when they gave up on the Nortel patents (doesn’t anyone remember that their bidding process there was a joke?). Sure, they could have spent almost $5 billion for an IP portfolio, but here they get that PLUS a viable manufacturer. Seems like a no-brainer to me.

    • Raun

      Yes, it’s definitely about patents. However, it’s worth noting that it’s not Google forcing Apple & HP to take notice, but rather steps Google has taken as a result of this situation being the other way around. While the ip portfolio is certainly enhanced, the growing pains could just be starting. This is why their initial plan is to let them run as a separate unit.

  • http://twitter.com/nkbme Nathan Beach

    I think this could be a good thing for HP, gives Samsung, HTC, etc. even more reason to branch out into other OS’s, with webOS looking like a pretty nice option. Thinking as a hardware manufacturer, licensing one of the best reviewed OS’s that is currently in the hands of a company that can’t seem to get hardware out the door seems like it would be a pretty attractive option. The game keeps changing pretty fast these days!

  • Matt_99_hey

    defense move. google is bleeding from lack of patents.

  • hpsalesguy

    That’s a lot of jack for patents.

    • Malette

      Yes, but considering some current litigation against Google it is chump change when you see the full picture of how much Google is worth. It very well could be a pre-emptive protective move. Patents under the belt can prevent future law suits and to a company like Google that can be worth 100 times what they are paying.

  • http://www.gregmadhere.com Greg Madhere

    Samsung or HTC would have to go all in with webOS like Moto did with Android. Question is who would be the better partner? Samsung has a broader reach in consumer electronics than HTC and would help HP reach those other markets…but HTC might be a little hungrier. Otherwise both these companies will just be clone makers from a branding perspective ..

  • PalmOn

    Come on webos roundup staff.  Where’s the mystery Sprint webos slab phone?  Is it available today as reported by your source or not?  What does your tipster have to say?

    http://www.webosroundup.com/2011/06/mysterious-sprint-exclusive-hp-phone-has-3d-capabilities-rumor/

  • http://twitter.com/tsaunders tsaunders

    Google buys Motorola Mobility: What does this mean? <– More page views for this site for reporting this (couldn't help it – :P)

    It will be interesting to watch this pan out.

  • Anonymous

    “According to Google they will be keeping Motorola Mobility a separate business unit and nothing else will be changing.”

    That is what HP said and look a year after what happened to Palm.

  • Anonymous

    “According to Google they will be keeping Motorola Mobility a separate business unit and nothing else will be changing.”

    That is what HP said and look a year after what happened to Palm.

  • http://AToTheT.org/ Ajay

    I guess after missing palm they went back on the search.. Maybe they should have just upped their palm offer a bit? Either way this values palm as 1/6th as valuable as motoMob, that’s good, right? Like, that’s better than their marketshare numbers, I assume..

  • http://AToTheT.org/ Ajay

    I guess after missing palm they went back on the search.. Maybe they should have just upped their palm offer a bit? Either way this values palm as 1/6th as valuable as motoMob, that’s good, right? Like, that’s better than their marketshare numbers, I assume..

  • http://AToTheT.org/ Ajay

    I guess after missing palm they went back on the search.. Maybe they should have just upped their palm offer a bit? Either way this values palm as 1/6th as valuable as motoMob, that’s good, right? Like, that’s better than their marketshare numbers, I assume..

  • http://AToTheT.org/ Ajay

    I guess after missing palm they went back on the search.. Maybe they should have just upped their palm offer a bit? Either way this values palm as 1/6th as valuable as motoMob, that’s good, right? Like, that’s better than their marketshare numbers, I assume..

  • http://AToTheT.org/ Ajay

    I guess after missing palm they went back on the search.. Maybe they should have just upped their palm offer a bit? Either way this values palm as 1/6th as valuable as motoMob, that’s good, right? Like, that’s better than their marketshare numbers, I assume..

  • Paulitition

    One of the last times google tried getting into the radio broadcasting hardware and software business, it didn’t last long and they sold it all.

  • Paulitition

    One of the last times google tried getting into the radio broadcasting hardware and software business, it didn’t last long and they sold it all.

  • MPM

    Since HP cannot make any phones it is time to license out webOS now!!! License it to at least HTC. They make a top quality product and maybe we can finally get a decent phone on Sprint!!!!