Google's purchase of Motorola Mobility casts doubts on the role of third party operating systems in the mobile market as Apple, Research in Motion and Google all have hardware and software stacks.
How this adventure turns out will be quite telling. There are two routes here. Either integrated stacks ---Apple and iOS, Google with Android and Motorola Mobility, RIM with QNX and BlackBerry OS and HP's WebOS--- dominate as they do today and win the wireless war. Or there's a huge opportunity for Microsoft.
The turning points in this debate will largely revolve around the moves of Google's Android partners such as HTC and Samsung and Microsoft.
For instance, if Microsoft moves to acquire Nokia and/or RIM then the mobile debate is over. All critical mobile players will have their own hardware and software stacks complete with app marketplaces and services. The panic move for Microsoft would be to buy a beaten up RIM, which makes great hardware, but hasn't quite got the software thing down yet.
Could Google's $12.5 billion purchase of Motorola Mobility really prod Microsoft to do something drastic? You don't need much time to think here. Microsoft tried to buy Yahoo in a case of Google envy didn't it?
Microsoft's calculus about whether it makes sense to buy a hardware maker or go it alone largely depends on what Samsung and HTC do. Just last week, Motorola Mobility CEO Sanjay Jha was publicly ruminating about working with Microsoft on Windows Phone 7. Those comments were clearly designed to get Google to spend a little more on Motorola Mobility.
Should HTC and Samsung move away from Android---an unlikely scenario in the short term given Google just gave the Android community patent cover---the only options would be Microsoft's Windows Phone 7 and HP's WebOS, which could be licensed.
My bet: Hardware players look to Microsoft or consolidate. Despite the initial patent perks of Google acquisition, it's likely that the search giant will have the best integration on Motorola devices. That means HTC and Samsung may play second fiddle in the future. And as Henry Blodget noted at Business Insider, the Google-Motorola Mobility deal has some serious channel conflict issues that could backfire.
Meanwhile, Microsoft will give HTC and Samsung any terms they want. In the end, Windows Phone 7 may do well merely as a hedge against Google.
It's hard to believe that the mobile market will be devoid of third party operating systems, but today the deck looks stacked. That stacked deck may mean a lot of Microsoft opportunity ahead.
Around the network coverage:
- Google buys Motorola Mobility and its patent portfolio for $12.5 billion
- Google's $12.5 billion Motorola Mobility bet: 6 reasons why it makes sense
- Google’s Motorola acquisition: Microsoft patent case takes a new turn