Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

Summary: It's inevitable that the Google-Motorola deal will shake up the Android ecosystem. It might even drive one of its top vendors into Microsoft's waiting arms.

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Google buying Motorola Mobility is destined to cause a major shake-up in the Android ecosystem, but it's also going to reverberate across the entire mobile space. In light of Apple's success in vertical integration and Hewlett-Packard buying Palm, the Google-Motorola deal could now force Microsoft to buy out one of its hardware partners in order to keep pace with its rivals.

The deal is a big win for Motorola Mobility, which has produced some of 2011's most innovative Android devices -- the Motorola Xoom tablet and the Motorola Atrix and Motorola Photon smartphones -- but its products have suffered from tepid sales, been a little bit ahead of the market, and have sometimes gotten lost in the shuffle of the burgeoning market of Android devices. Putting the Google brand name on these Motorola devices would immediately give them a lot more marketing punch and consumer appeal.

But, Google is also going to have to deal with fallout from other Android partners. A lot of companies have been rallying around Android over the past 24 months -- Samsung, HTC, LG, Lenovo, ASUS, and many more. Google just made all of them feel like second-class citizens in the Android ecosystem. They will start worrying that Google is going to keep its best Android innovations close to the vest, release them on their own Google-branded devices (made by Motorola), and then let the rest of their hardware partners scramble to find a niche to innovate on.

Google Android chief Andy Rubin tried to downplay those fears on Monday. He said, "Our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open -source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices."

Of course, he's going to say that. He has to. However, if you look at the way Google partnered with HTC for the Nexus One, Samsung for the Nexus S, and Motorola for the Xoom -- and gave those companies a leg up on the latest Android software -- then you have to assume that most of that kind of partnering will be done internally with its new hardware division run by Motorola.

Those worries are going to affect some companies more than others. Samsung isn't likely to get too bent out of shape about it. It is largely a manufacturing company that wants to sell as many devices as it can, and it already has a nice foothold in the Android market and great relationships with lots of telecom carriers. Samsung is more about price and hardware features than innovative design or being first to market. Not much will change for them. The same pretty much goes for LG, even though it's much newer to the Android ecosystem.

The biggest potential loser in the Motorola deal is HTC, a much smaller company that's focused primarily on smartphones. HTC is all about design, innovation, and being first to market with cutting-edge devices like the HTC ThunderBolt, which was the first smartphone to run on Verizon's next-generation LTE network. You have to think that in the future, companies are now going to partner directly with Google for leading-edge Android devices.

This could push HTC toward Microsoft. HTC was originally focused on Windows Mobile devices, but Android arrived on the scene at a time when Microsoft's mobile strategy was unclear, so HTC shifted most of its effort to Google and delivered excellent designs, such as the Nexus One and popular devices like the HTC EVO. Still, HTC has retained its ties with Microsoft. When Microsoft pulled off its mobile reboot with Windows Phone 7, HTC jumped on board as a partner and has produced two of the best WP7 designs -- the HTC HD7 and HTC Trophy.

There is still a lot more sales potential in the Android ecosystem than the WP7 ecosystem, so I wouldn't expect HTC to abandon its Google partnership in favor of Microsoft. But I wouldn't be surprised if HTC was suddenly a lot more willing to listen if Microsoft came calling with a buyout offer.

An HTC acquisition would have two big benefits for Microsoft: 1) It would take one of the highest quality vendors out of the Android ecosystem (and the one with the best software layer - Sense UI); and 2) It would help Microsoft bring top-notch devices to market more quickly.

With all of its main rivals -- Apple, Google, and HP -- now vertically integrated in mobile, Microsoft is going to have to seriously consider whether it has to go the same route. If it sticks to the third-party model alone, it will have a hard time keeping up, since it takes a lot more time to release software and coordinate with vendors than to have hardware and software divisions working hand-in-hand throughout the entire product development life cycle.

There's also one other issue Microsoft has to consider: Nokia. Earlier this year, the two companies signed a huge deal to get Nokia to ditch Symbian in favor of Windows Phone 7 as its primary smartphone platform. If Microsoft bought HTC and started releasing Microsoft-branded WP7 devices, it could sour the Nokia deal and push Nokia to pursue Android devices in addition to WP7 phones. With a Nokia partnership and joint development already in progress, it may simply be more likely that Microsoft would purchase Nokia over HTC -- although if Microsoft wanted to get really serious about vertical integration in mobile, it could potentially purchase them both.

Also read

The was originally published on TechRepublic.

Topics: Nokia, Android, Security, Mobility, Mobile OS, Microsoft, HTC, Hardware, Google, Smartphones

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29 comments
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  • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

    It would be like <a href="http://techcrunch.com/2008/02/11/meanwhile-microsoft-buys-danger/" target="_blank">buying Danger</a> all over again. Hence they wouldn't know what to do with it.<br><br>PS. <a href="http://blogs.computerworld.com/18551/steve_ballmers_latest_bellow_im_not_stepping_down_at_microsoft" target="_blank">Ballmer</a> did say they'll spend whatever it takes.
    Return_of_the_jedi
    • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

      @Return_of_the_jedi Danger was a software company not hardware and they were creating software that was not compatible with the development software that MS uses.
      cool8man
  • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

    You guys keep pushing this in hopes of creating negative press but everyone knows this addresses one area that Google needed and that was Patents.

    I do not know what is going to happen with the Hardware portion but I would bet it does get sold to another company.
    slickjim
    • And the fanboies are thinking this is wonderful

      @Peter Perry

      Still thinking Google is some altruistic company willing to pay 12.5 billion with no ROI.

      What reason does ANY OEM have now to continue a future with Android?
      Bruizer
    • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

      @Peter Perry : No because Motorola Patents are not part of the Motorola Mobile - Google deal...
      EricDeBerg
      • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

        @EricDeBerg Please site your source. Motorola Mobility is not in possession of Motorola's mobile patents?
        clcrockett
  • Wall Street thinks....

    Good move for Apple not so good for Google. Time will tell how this plays for HTC and other OHA members.
    Bruizer
  • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

    Um. No. Microsoft has really nothing to gain from it.

    Their partnership with Nokia and their acquisition of Skype still has them ahead of Google.
    The one and only, Cylon Centurion
    • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

      And I'm sure HTC will love to fight it out with Nokia over the 1.6 percent of the phone market (2nd quarter 2011...down from 3.6, per Gartner) Microsoft currently has with WM and WP7. They'll surely clean up with that.
      johnf76@...
      • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

        @johnf76@...
        Just gives them that much more room to grow!
        LoverockDavidson
    • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

      @Cylon Centurion : Yes right... But you don't think finaly Microsoft should built their own Smartphones?
      EricDeBerg
      • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

        @EricDeBerg

        Not really. I think Microsoft would crumble without the support of hardware OEMs. They're Microsoft's lifeline.
        The one and only, Cylon Centurion
  • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

    Of course, there is another alternative...MS could structure a Nokia-type deal with HTC.
    crystalsoldier
  • Poor Little Linux

    I recently bought an N900, which runs a modified version of Linux called Maemo. If Microsoft bought Nokia, that would probably mean and end to the Linux-default-OS-on-a-phone idea, because I don't picture any other companies running with it. This makes me very sad.
    nintendoeats
  • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

    Neither. Microsoft isn't going to close its channels like Google just did. By not having one hardware vendor this allows Microsoft the flexibility to put WP7 on any hardware device. Google just shot themselves in the foot because its android partners just got screwed and will no longer do business with them. Not only that but now Google will be open to antitrust suits. Not a good day for Google.
    LoverockDavidson
    • They &quot;bought&quot; Motorola....

      @LoverockDavidson

      but doesn't this need to pass FTC regulations first before the takeover can be accomplished? And what of the DoJ's proposed antitrust oversight of Google?
      Joe_Raby
      • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

        @Joe_Raby

        Yeah, this needs to go through both the FTC and the EU, I believe. Not sure how that will work out now that they are under investigation.
        The one and only, Cylon Centurion
    • On belief and lack of information ...

      @LoverockDavidson


      Feel the hate from the 'Droid partners cited here:

      Peter Chou, CEO, HTC:

      We welcome the news of today's acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.

      Bert Nordberg, President & CEO, Sony Ericsson:

      I welcome Google's commitment to defending Android and its partners.

      Jong-Seok Park, President & CEO, LG:

      We welcome Google's commitment to defending Android and its partners.

      J.K. Shin, President, Samsung, Mobile Communications Division:

      We welcome today's news, which demonstrates Google's deep commitment to defending Android, its partners, and the ecosystem.
      ~~~

      http://www.engadget.com/2011/08/15/google-acquiring-motorola-mobility/

      As usual your mouth-gun is breech blocked.
      Still Lynn
      • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

        @Still Lynn

        Quit violating other's IP, and they wouldn't need defended. ;)
        The one and only, Cylon Centurion
      • RE: Will Microsoft pursue HTC or Nokia in reaction to Google-Motorola?

        @Still Lynn
        And they all said almost exactly the same statement and nothing more. In other words, they only said it to be nice but they still feel the knife in their backs.

        http://www.zdnet.com/blog/bott/googles-coalition-speaks-with-one-voice/3771
        LoverockDavidson