Google expects Motorola Mobility purchase to deliver big returns

Google expects Motorola Mobility purchase to deliver big returns

Summary: As CEO Larry Page expects "great devices" to come from the purchase of Motorola Mobility, what could that mean for other Android ecosystem partners?

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TOPICS: Google, Mobility
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Google is banking big time on its proposed bid for Motorola Mobility, based on a recently published company update from CEO Larry Page.

According to the letter, Page is expecting "to build great devices capitalizing on the tremendous success and growth of Android and Motorola’s long history of technological innovation."

Google is planning to pay $12.5 billion to acquire Motorola Mobility -- a deal that could be considered all but ready to go at this point following approval from both the European Commission and the U.S. Department of Justice.

When all is said and done, the acquisition of Motorola will give Google a hardware arm, which will presumably concentrate primarily on producing new Android products.

Nevertheless, even as it will include the development of other products not based on Android, what remains to be seen is how this is going to affect the heavily-fragmented Android ecosystem overall.

Page and company have repeated (as he did in this memo) for months that Android would remain open to all, but certainly there is going to be room for worry about how Google would be promoting its in-house projects over its competitors, which are incidentally partners too. Makes for a confusing relationship.

The letter also implies some pressure for Motorola Mobility if/when it comes into the Google fold. Google has already suffered some minor stumbles when it comes to hardware products its teamed on, such as Google TV and Chromebooks as consumer devices. With the addition of Motorola, Google is obviously looking to develop products that will go head-to-head with Apple's iPhone and iPad once and for all.

Page is hoping that Motorola will deliver.

via MarketWatch

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Topics: Google, Mobility

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8 comments
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  • Google's already caved to the carriers with the Nexus brand.

    They'll have to start fresh with tablets to get any traction, but I don't think MMI has any fresh ideas. Motorola may be Compaq to Google's HP.
    matthew_maurice
  • It will take a decade to get an answer

    It will take a long time to figure out if google will ultimately succeed, short term success doesn't count.
    owllnet
  • Android's future does not look so good

    Based on information Google released over its case with Oracle, it appears Google has made about $550M dollars from its mobile OS from 2008.

    http://wmpoweruser.com/is-google-killing-itself-with-android/

    In fact it is possible that MS makes more money from Android (in the way of patent fees) than Google does from its own OS.

    http://gigaom.com/2011/07/06/can-android-be-microsofts-next-1-billion-business/

    It therefore appears that Google's Motorola purchase is largely an attempt to make money from Android via smartphone and other hardware sales. If Google is successful, I can't see how Motorola's version of Android will be the same that everyone else receives. Google will likely become preoccupied with Motorola Android devices, and all other efforts within the Android ecosystem will become secondary. As I've said before, it is hard to make money in ecosystems which are too open. I believe Google's acquisition of Motorola will put such a strain on the Android ecosystem, ODMs will leave it in disgust from not being able to make money.
    P. Douglas
    • Are you kidding?

      Google doesn't charge for the Android Market, if they want to make more money, they will simply charge a fee on that...

      Right now, carriers, payment processors, and manufacturers get the 30% cut that Apple would take and Google gets the Ad revenue.

      Google isn't going to ditch the world's number one Mobile OS anytime soon.
      slickjim
      • Google might not, but the OEMs may have second thoughts.

        At least LG with their [b]negative 3.5%[/b] margin on Android phones may rethink the idea. They're losing money on each one.
        matthew_maurice
  • Think this is what I've been saying all along.

    Other OEM's have every right to wonder what if any money they want to invest in continued development of Android devices. Especially when many of these OEM's are in the process of doing both Android and Windows phones. So with Google in bed with Motto why and equal amount towards each especially since it would seem that putting more development monies into Windows phones might be the wiser money move. Just saying

    Pagan jim
    James Quinn
  • It will take a miracle and very experienced "life support" management ...

    ... to bring Moto Mob back to life.

    The division has being working in the red for almost 10 years, with only one quarter when they barely made it even ... just to go back to the red the next quarter.

    So it will take a miracle and a hell of an amazing management team to actually turn Googorola into a profitable business.
    wackoae
  • A brief history of Moto Mobility...

    So, Qualcomm sells their phone unit to Kyocera. Things putter along, but a group of engineers wants to make a very thin phone. Well, Kyocera is a counter puncher, never a leader. The engineers get irritated and go over to Motorola to make the phone. Turns out that Moto is just as bad as Kyo, with more bureaucracy. In despair, they snitch a bit of money here and there from accounts that were closed to make the prototypes. Well, CES was coming up, and Moto had nothing. The San Diego guys say, "How about this?" Two reactions at Moto Corporate: relief they had something, and intense irritation that they did not follow the chain of command. So, the Razor was born, and Moto Corporate took credit. Next step, they shut down the loopholes that made the phone. Then, most of the Razor engineers quit and went back to Qualcomm. Years pass. The Razor gets old in the tooth, but Moto really doesn't know how to make a great phone, since they didn't really make the Razor. Floundering badly, the unit is sold to Google.
    Tony Burzio