Google goes into excuse mode on Motorola

Google goes into excuse mode on Motorola

Summary: Google says that it is restructuring Motorola Mobility and it inherited a product pipeline to work through. Can Google get Motorola humming once it gets the pipeline?

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Google's Motorola Mobility in some respects remains a head scratcher, but executives at the search giant are calling for some patience---and a dollop of excuses---as the device maker is restructured.

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Motorola Mobility was front and center on Google's fourth quarter earnings conference call. CFO Patrick Pichette said:

No one should be surprised if results from the segments are variable for quite a while as we restructure the business. And remember, we inherited a 12-18 month product pipeline that we're still working through.

Also: Google's Q4 earnings beat estimates following dispute with Wall Street | Google statement | Google's Motorola Mobility acquisition: Does it still add up?

So now Motorola Mobility products are like inheriting a bad economy. That excuse doesn't quite fly in the business world although it's useful in politics. Why? No one told Google to buy Motorola Mobility. When Google bought Motorola Mobility it didn't position the deal as a fixer upper.

As noted previously, you can argue Motorola was all about the patents for Google. That argument seems quite logical. But let's not pretend that Motorola Mobility will suddenly be wonderful under Google's hardware roadmap. After all, Google hasn't been a hardware juggernaut. Until it concocts something like the Xbox, it'll remain a hardware mystery.

But the clock is ticking. The Motorola Mobility acquisition will be judged once Google dictates the pipeline. For now, Google is pleased with the velocity of change at Motorola and $1.5 billion in gross revenue in the fourth quarter, excluding the home unit. CEO Larry Page may be pleased, but we'll see how long investors maintain their patience.

What will Page do with Motorola Mobility? Page said:

I am excited about the business and today's multi-screen world. The opportunities are endless. Think about your device. Battery life is a huge issue. You shouldn't have to worry about constantly recharging your phone. When you drop your phone, it shouldn't go splat. Everything should be faster and easier. There's real potential to invent new and better experiences.

Topics: Hardware, Google, Mobility, Smartphones

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20 comments
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  • Why would Motorola Mobility need to concoct something like the Xbox?

    "After all, Google hasn't been a hardware juggernaut. Until it concocts something like the Xbox, it'll remain a hardware mystery."

    Is that the standard you base a viable acquisition of a mobile device company upon?

    I don't understand that statement...

    If you are saying that Motorola Mobility is not Microsoft you are right, but where does that fit into the subject?
    coastin
    • Doesn't need to be the Xbox, but...

      in defense of Larry, if the Moto acquisition wasn't a purely a patent grab, one would expect the acquisition of a hardware company to result in some hardware. And, while Moto continues to produce phones, with this type of acquisition by Google, most are expecting something beyond the status quo that resulted in Moto being sold in the first place.

      Pipeline or not, the longer Google waits to do something different with Moto, the more it looks like what many felt it was all along, a patent grab.

      Also, I think it's important to distinguish in the Xbox comparison whether we're talking about Xbox today, or Xbox in it's infancy. I think the infancy comparison is more appropriate. Google doesn't need to come out with the next big thing on Day 1, but if Moto's not a patent grab, then you'd expect them to do something new and then commit to it, even if it takes time to gain traction. Cranking out run of the mill Android handsets like the HTCs, LGs, etc. and selling off parts like the STB business seems like treading water, not really anything visionary or strategic.
      TroyMcClure
      • I seem to recall

        a recent press release from Google about the XPhone and a new tablet.

        Maybe I am not the only one who recalls that:

        http://www.computerworld.com/s/article/9236070/Google_X_phone_tablet_spur_speculation
        coastin
  • Google: We're one of the World's Largest Hardware Companies

    http://www.wired.com/wiredenterprise/2012/06/google_makes_servers/
    user48377
    • Psssst - I think he's talking about consumer

      not data centers...
      ScanBack
  • Lazy Article

    Head scratcher? Really Larry? Anyone who could be bothered spending more than 5 minutes thinking about it could come up with three great reasons:
    1. The enterprise. Google will leave the consumer market to Samsung, HTC, etc to keep them sweet, and focus on producing Motorola products that appeal to business and corporate buyers as they push into the enterprise with Google Apps.
    2. A distribution channel. One of Google's biggest issues has been the logistics of getting their physical products into the market place.
    3. R&D. For all their issues over the past few years, Motorola still have a decent number of clever engineers who will be able to drive innovation in the smartphone market.
    There you go Larry. Didn't even take 5 minutes.
    NickABryant
    • Not so Fast

      For each of the 3 items listed, Google has one nemesis to deal with.

      A hugely powerful mass marketing Android gorilla named Samsung.

      Google needs to effectively ally w one of Samsung, Apple, Microsoft, or Intel. Without an alliance MM could be wasted money.
      pk de cville
      • Google can kick all the partners out

        They just have to produce and sell their phones at cost, no one will bother to make the phone when there is no margin. But for Google it's a viable option.

        Wonder if there is any profit for Asus or LG for making the Nexus 7 and the Nexus 4. The cost of parts and labor is likely 90% of the selling price, if you add service cost and loyalty to Microsoft and Apple. It really makes you wonder why Asus or LG will make them, unless Google is subsidizing each one of them.
        ASPNET
        • as long as people buy...

          The more I see fewer phones with cheapercosting, removable MicroSD cards the more I avoid those brands. The Nexus lacks MicroSD cards, for example...
          HypnoToad72
    • If I were you...

      I'd send my CV to zdnet, they could use a new chief editor...
      Jean-Pierre-
      • 100% with you!

        100% with you!
        Sam Kumar
    • Evident

      "2. A distribution channel. One of Google's biggest issues has been the logistics of getting their physical products into the market place."

      Whew, that is shining truth. Look no further than the Nexus4 for evidence of this! What a debacle!
      louishelps
  • Larry

    you buy a company for 12.5 billion and completely turn everything around in one year, lets see how you would do especially after running another bigger company stop whining like a little kid. Google has been steadily reducing Motos money bleeding every quarter and yes when they bought the company, said company had a myriad of contract with a host of other companies such as verizon; They can't just come in and say oh well screw contracts is what we say. We wanna please Larry from zdnet. wah wah wah.
    wolfn11
  • "That excuse doesn't quite fly in the business world"

    Actually, it does.

    Only a journalist would expect Google to turn the company around and come up with a whole new product line in a few months.

    Here in the real world, we'll wait a little longer, rather than have some half-assed unfinished products that will allow the same journalists to blame Google for making shoddy products at Motorola.

    Engage brain! Think about the issues! THEN write a fully developed article! No excuses!

    Not having thought it through doesn't quite fly in the business world.
    Heenan73
  • A journalist who acts like Wall Street

    Larry,

    So the only reason to invest is for the next quarter results?
    DisruptiveThinker
  • Why Buy Motorola?

    Easy... A great product line that can be improved even more. The other issues can get sorted out. I just moved from a Samsung product to a new Droid RAZR M. . . WOW!! I'm impressed. My significant other uses an Apple iPhone 4s. . . It's OK, but nothing special. For my $$, the current Andoid OS on my RAZR M (4.1.1) makes the Android OS and iOS at least equal competitors. . . And this from an addicted iPAD 3 user. From the user's perspective, I believe the Android system to offer the user much more freedom in finding apps that fit one's particular needs and desires---Yes, with freedom comes risk, but Americans are used to that combination. They actually feed on it.

    Perhaps the engineers, especially those with creative minds, at Motorola are what Google sees as the necessary and sufficient means to advance its Android OS to its fullest potential. The current crop of Droid phones are surely the more elegant offerings today, offer the users the most choices in sizes, and offer the best implementation yet of the Android OS. . . So, what's a user not to like? Go Google. . . Just don't kill the goose that's laying your Golden Android egg with over control. Clean up its financials and management to make it better able to do what it has done and still does the best. . . Let's see some new 8" Droid tablets with USB, added storage capability (SD cards), etc. --- And, maybe equipped with phone and Bluetooth module, mono and/or stereo, that lets the phone be easily used as well. And, why not be able to use the same phone number on more than one device?

    Personally, I believe we'll see the Google-Motorola partnership produce the most elegant, useful device/OS combinations yet. And, here's hoping neither will get in the way of the other.
    TheRusher
  • Google and Motorola

    I believe they can if they want to. It will take time just as any merger does.
    dhays
  • Paradox

    and Rush, you left out the most important issue of smart phones. At the moment they don't make many successful phone calls. Observing my family and work colleges, they are constantly complaining about dropouts, poor reception and the lack of signal. The current crop of phones may be smart, but they are terrible "phones". Can the reviewers also add a test of making phone calls? Some users still put a lot of value on conversation.
    pandrew3
  • What if....

    Funny, really, the history of Motorala is that they have made great devices.

    Google haven't really made a great anything other than a search engine.

    Perhaps Motorola execs should execute a putsch.
    amclpreston
  • No X box

    The Xbox is a tool for selling software. Microsoft is making the money on the software (over priced games) no the X Box it is sold close to the cost of production. Why do you Imagine Motorola or Google has anything to sell here?
    Altotus