My, what a difference a weekend makes.
Yesterday morning, Google announced its intention to buy Motorola Mobility, for a cool $12.5 Billion, pending regulatory approval.
And to think I was worried about having nothing to write about this week! HA!
Suffice it to say that this move has changed everything in the smartphone and tablet industry, literally overnight. It transforms Google into an Original Equipment Manufacturer (OEM) of consumer products, just like Apple is with its iPhone and iPad.
Google of course is communicating this as a pure patent and intellectual property play, as it would be acquiring 24,000+ patents in the deal.
But we know that this essentially turns Motorola into most favored nation as it relates to Android handset and tablet manufacturing, even though it intends to run Motorola as a separate company and has stated that it will continue with its Open Handset Alliance and continue to license Android to companies like HTC, Samsung, Acer and Asus.
However, it’s much more likely that at some time in the future all Android handsets are going to be branded as “Google Droids” regardless of who the actual Original Design Manufacturer (ODM) is.
Motorola can still work with Samsung and HTC in their traditional roles as contract manufacturers, as it works with a number of ODMs in Asia to produce their products already.
The only difference is that instead of many different Android phone brands and models, there will eventually be one brand, one product line. Droid.
Under this New World Order, as brands, I find it unlikely that companies like HTC and Samsung will continue to have Android products of their own by using the Open Source and unlicensed versions of Android, even though this is something that they could still elect to do on their own.
I expect Google to clamp down on the licensing of the “Google Experience” version of the OS and reserve that exclusively for Motorola’s or Google’ own branded products.
For consumers and the ODMs themselves, this is probably a good thing. It permanently resolves the Android fragmentation issue that has been dogging the platform for so long. Samsung and HTC probably will not care how they make their money in this business, provided that there is a revenue stream to be had for contract manufacturing and components.
It also eliminates them as litigation targets if Google and Motorola are going to be taking all of the Android litigation heat from now on if their names are on all the products.
So when they aren’t acting as contract manufacturers or component suppliers for Google/Motorola, what will they be doing then? Well, I suspect they will have to make devices that run other operating systems.
Microsoft’s Windows Phone and Windows 8 are certainly obvious choices for both HTC and Samsung for additional revenue streams. Acer, Asus and the other minor players may find themselves with licenses of Android for some time, only to find themselves cut off later on and having to seek other options.
Such as HP’s WebOS.
Even when I have criticized HP heavily, I still maintain that Palm’s WebOS 3 is an excellent operating system, this despite the fact that I feel that the TouchPad has not been a particularly good good showcase for it nor has it been able to demonstrate superior value to Apple’s iPad.
This can be fixed. However it requires that HP let go of WebOS and allow companies which are much more skilled at marketing and product design to take it and run with it.
The way I see it going is something like this. HP acts as the technology foundry for WebOS, and possibly Open Sourcing important parts of the OS, including the Luna GUI.
In lieu of Google and Apple hammering them in brick and mortar retail with superior firepower, where they are suffering for attention at places like Best Buy, that the company partners with a large e-tailer giant: Amazon.
Amazon acting as HP’s primary retail partner has several purposes. One, to provide not only the sales and distribution network for WebOS tablets and phones, but to also provide the cloud services and content that WebOS desperately needs in terms of music, video, storage and ebooks.
If it’s one thing that Amazon knows it’s marketing, online sales and Cloud. And it knows how to work with Asian ODMs and their supply chains, as evidenced by their success with Kindle e-readers.
Thirdly, Amazon would also be the primary brand of WebOS devices. This would mean of course that Amazon would have to abandon or curtail its existing strategy with its Amazon Appstore for Android and its plan to produce Android Tablets.
In the wake of this entire Google/Motorola tsunami, I think that Bezos and crew probably needs to re-think whether Amazon wants to work with unlicensed/Open Source versions of Android for its products, or to become the most favored nation for WebOS.
If I were Jeff Bezos right now, I would strongly be considering the latter. And if I were Leo Apotheker, I would be courting Bezos with heavy incentives to do so, such as giving Amazon a big piece of the action with WebOS application sales.
I have no idea and under what terms Amazon may have decided to implement Android on its forthcoming tablet, since very few details of this device actually exist in the public and much of it is rumored.
That being said, I have recently speculated that they may be releasing a product that uses a heavily modified version of “Gingerbread” which is currently the only Open Source implementation of Android.
It’s certainly possible that behind the scenes, prior to all of this Google/Motorola seismic activity, that Amazon managed to secure a multi-year licensing deal with Google. But my gut instinct is that they have not. And that leaves quite a bit of exposure for Amazon.
Should Hewlett-Packard, Amazon and the Asian ODMs team up to form an alliance and an alternative to Google and Motorola’s New World Order for Android? Talk Back and Let Me Know.
