Google and Moto: The Best- and Worst-Case Scenarios
Sep 20, 2011 5:00 AM PT
Google's recent plan to buy Motorola Mobility has the potential for reshaping the entire Android landscape. If it wins regulatory approval for the purchase, Google may only have a short time span to connect its marketing strategy.
When and if this happens, it could further fracture the open source Android operating system. Depending on how Google follows its purchase of a hardware division, a future release of Android might usher in a more tightly controlled platform.
Consumers might see choices between hybrid Google Android devices with newer features than are available in the older open source versions of Android. That type of division could separate hardware manufacturers, propelling some to rally around Microsoft's Windows Phone platform.
"If Google does plan on making an integrated move with hardware makers, we will know that within one year's time, maybe even within one month. It would be evident very quickly if Google starts trying to build a closed ecosystem," Anandan Jayaraman, chief product and marketing officer at Connectiva Systems, told LinuxInsider.
Plan A or Plan B?
Two main possibilities could develop with Google in control of its own already-established phone-making plan. If Google's purchase bid wins regulatory approval, the Motorola deal will change the Android landscape. What remains to be seen is the way the best-case and worst-case scenarios for the Android platform plays out, according to Jayaraman.
Two scenarios are now likely to occur, Jayaraman believes. The deal was driven by the increasing pressure on the Android ecosystem from patent suits and the recent acquisition of Nortel mobile patents by a consortium of bidders that included Apple and Microsoft, he contended.
Either Google will divest the hardware business very soon, or it will attempt to build an integrated hardware-software device similar to what Apple developed into the iPhone. That will force Samsung and other device manufacturers to pursue Android alternatives to protect their long-term interests.
"A fractured Android landscape will help Apple, but if Google starts to become the real Apple alternative with a deeply integrated device hardware and OS, this can turn out to be a very interesting battle," said Jayaraman.
Google is probably planning to cannibalize what it can from the few thousand Motorola patents it will grab in the purchase. Locking down the Android OS will really fracture the Android ecosystem, Jayaraman noted.
"Right now I think Google has more than 20 partners licensing Android. Hardware makers will be less inclined to partner with Google. Instead, they could start doing other things. For example, many of them might go to Windows Phone," Jayaraman surmised.
Android is already way too large for Google to do something along the lines of an Apple monopoly. That task would be hard for Google to achieve. It really doesn't understand the hardware business.
"Google's strength is in developing the software and letting the ecosystem build up around it," he said. "Frankly, taking that on would be a huge risk. To become more proprietary, Google in the future would have to develop future versions of Android that are not open source."
Buddy or Bully?
The only other viable scenario for Google's rebranding of Motorola Mobility is for Google to continue on its present path and get some action on its Motorola hardware, according to Jayaraman. Here is where the continued partnership by manufacturers with Google will lead to some improved monetization of the open source Android ecosystem.
Somehow they will have to find a way to capitalize on the advertising built into Android mobile devices. So far the money stream from Android back to Google has been much less than what Apple earns from every proprietary device it sells, he said.
"The truth is that Google has not been able to monetize Android that well. Because it's open source and free, it really isn't all that easy to monetize around it," he concluded.
The Android platform is one of the most popular mobile operating systems in the market. It's doubtful that the merger between Motorola and Android will change that in the short term, noted Mike Manzo, CMO of Openet.
"If nothing else, Android will have a dedicated device maker that could push the platform beyond the influence of the traditional smartphone market. With the support of both Google and Motorola, Android could become a part of the Google TV project -- which would be a boon for consumers looking to integrate their cloud-based lives," Manzo told LinuxInsider.
Motorola was working on a number of projects involving getting software to run on TV devices, noted Jayaraman. So access to thousands of Motorola patents could be Google's big advantage in taking over Motorola.
Boon for Windows and Nokia Phones?
The worst-case scenario for the Google/Motorola deal is that Android is removed as the operating system for competitive device makers, Manzo suggested. Then Windows Phone would start to take on Android's market share.
"Overall, users will get more of a differentiated market, but each device and operating system will continue to create new features and services -- to the detriment of traditional carriers who struggle to keep up with today's traffic," said Manzo.
This could be a huge blessing for Windows and Nokia, agreed Jayaraman. If Microsoft could find a way to get the Windows phone platform better distributed, it actually could become stiff competition for Android as Google plays around with its own phone-making entries.
"Of course, it might be a problem for Nokia," Jayaraman noted.
What's more interesting is the consumer direction Microsoft has taken with Windows Phone. But it pales in comparison to Nokia phones, according to Brian Reed, vice president of products and CMO for BoxTone.
"Nokia still sells more consumer handsets than anyone else in the world, especially in Asia and in the low-end market," he told LinuxInsider.
Overall, it will be good for the industry by providing consumers with another option. Google will end up with a better product to deliver a better end-to-end experience, he explained.
For example, Google will go through what Research In Motion did first with its BlackBerry OS and phone and what Apple did with its iPhone. As Google takes on some of the hardware business, it will have a greater appreciation for some of the intricacies of working the blend between the hardware and software, noted Reed.
Google will keep Android as a wide-open world, Reed said. The horses are already out the barn on that one.
"Google isn't in a position to have a proprietary product like the iOS. The plan is for Android everywhere. I think Google is going to continue with that approach or strategy," said Reed.
Taking on its own phone manufacturing division will help Google to prevent a repeat of its trouble in rolling out Honeycomb to the product makers. That would have gone smoother if Google controlled the hardware, Reed said.
Google worked with a select manufacturer to get the hardware and software combination just right. Then they rolled it our to everybody else. The Motorola division as an in-house entity could serve that purpose next time around.
Google's acquisition of Motorola Mobility fits into a business model already emerging within the Android ecosystem, according to Reed. He is seeing what he called a "long-tail" interest in all kinds of specialized user devices and experiences using Android.
"We're working with a number of Chinese device manufacturers right now who are building various kinds of devices. These are going to be used in very specific work functions. Banks will provide tellers with specialized Android tablets that are custom manufactured. They use the standard Android OS with several specific tweaks. These have extra security and special apps on them," said Reed.
Rather than using off-the-shelf hardware, the banks are working with specialized manufacturers. The same thing is happening within the transportation and distribution industries as well as in the healthcare field, he said.
"I think Android is going to flush out the long tail, especially on the business side. Because it is a great operating system that [Google is] licensing prodigiously, lots of different kinds of devices can be manufactured with it. We will see a lot of those exploding into the market over the next year," said Reed.
A year or 18 months from now, Reed sees Apple with a variety of devices having a permutation of small and large variations with lots of sub features. It would not surprise him to see variations of the iPad and the iPod Touch.
Add to his view a picture with hundreds if not thousands of Android devices in it, including specialized vertically integrated devices. Google will be selling phones, maybe through carriers as well as directly. Microsoft and Nokia will be shipping their devices a year from now.
"I think the world is going to be full of smart devices using smartphone operating systems. I tend to believe that the rising tide raises all boats. I see almost all good and very little bad from the Google and Motorola deal. What Google has done is a very shrewd move," Reed said.