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Google buys Motorola Droid

Posted by Scott Golby


In stunning news Google has agreed to purchase Motorola Mobility (maker of the Droid handsets) for $12.5 billion.

Patent War
One of the major reasons for the purchase, as explained by Larry Page in his Google blog posting is
"Microsoft and Apple are banding together in anti-competitive patent attacks on Android". This is certainly a key issue after Apple were able to shut down sales of the Android-based Samsung GalaxyTab in Europe.

Apple has developed many cool and innovative things with the iPhone and has been attempting to defend its turf.
Motorola on the other hand has a long history in the wireless telecommunications field, and a very deep patent portfolio.

Patents and inventions are a curious thing, the PC mouse was invented by Xerox, but I'm sure the vast majority of readers would have put down Microsoft Windows as where point-and-click started.

Who will win out when Apple clashes with Motorola/Google only time will tell, it may not be who you think.

Other hardware manufacturers

Now Google have what is called in tech circles "the full stack", both the software and the hardware platform.

What must the other Android handset and tablet manufacturers, like Samsung and HTC be thinking at the moment? While both have issued press releases saying that they are happy with the deal this must be a stunning blow to them. Google, once savior versus companies like Nokia and RIM/Blackberry (who had their own OS) has now jumped into competing against them.

Will this force Microsoft, with its new Windows 7 mobile OS to purchase a company like Nokia who they have recently become closer to?

Unified Platform ?

One thing that Android has been suffering from its fragmentation. So many different types of handsets, different screen resolutions, some with keyboards, some without.

Apple has managed to steamroll Android in this regard, having the standard screen size for all the models up to the iPhone 3GS has been a huge help for developers. Then doubling the resolution for the iPhone4 was sheer genius, very few applications need to be completely rewritten, they just 2x every pixel on the screen.

Google's purchase of Motorola could be a boon to making a standard set of platforms, just like a standard developed when Compaq cloned the IBM PC. How long that will take the shakeout will be interesting to see, it took a decade for Dell PCs to rise to the number one spot after getting into the same game as Compaq (now owned by HP).

The Future

Google are going to have a huge challenge ahead of them. The Android OS got its start on the top of Linux (and if you talk to Oracle atop the Java programming language) so they didn't have to invented Android from scratch.
Google are used to having very high profit margins, their online advertising business splits the revenue 60% for them, 40% for the websites to show the ads.
The hardware business is completely different, margins are quite small, to the point where famous companies like IBM have gotten out of the PC business altogether.

How will Google react to this new reality and a business model with actual physical products that need to be moved around ?

Please let us know your thoughts in the comments section below.

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