By now all of the pundits and analysts have weighed in with their ideas of why Google (GOOG) bought Motorola Mobility. Most believe, as I do, that it was about Motorola’s patent portfolio.
Google has finally come to realize that in the wireless world patents are needed not only to protect your own Intellectual Property (IP) and to charge royalties to other companies that want to make use of the technology, but more importantly, patents are for bartering with other companies. If you have a technology that infringes on someone else’s patent you can trade licenses and usually gain access to their IP in exchange for some of yours.
Google was blind-sided during the Nortel patent sale and there is a lot of competition for the InterDigital patents, so I am sure the Motorola deal is perceived by Google as a huge win. Motorola, after all, has been in the wireless business for many years and has a lot of patents, lots of cross licenses, and more patents in the pipeline. Motorola was one of the first companies to develop patents for GSM phone service and has used them to barter with other vendors for years, keeping its licensing costs to a minimum.
So I should be looking at Google’s purchase of Motorola Mobility as a brilliant move yet I am not. Instead, I am looking at this deal as a real opportunity for Apple (AAPL), Research In Motion (RIMM) and Hewlett-Packard (HPQ), all of which have their own operating systems for cell phones and/or tablets and all of which watched in horror as Google entered the market and soon gobbled up more than 40% of the wireless device market with Android.
But this is the downside for Google.
It can say, all day long, that Motorola Mobility will stay as a separate division and that Android will remain open and available for all to use, but that does not mean that those who have already stepped up to Android believe Google. The current Android landscape includes Samsung, LG, HTC, and scores of other phone and tablet companies, all of which believed that Google would continue to provide Android for them and they would all fight it out in the marketplace, each with their own special enhancements to their version of Android.