Google’s Strategic Move to Buy Motorola: Will It Work?
Can Google pull off its bid to buy Motorola Mobility for $12.5 billion? This is the question that many people in the tech and mobile spaces are asking. There’s no doubt that it’s a strategic move on Google’s part, but it does raise some issues.
How do you see this deal impacting both handset makers and consumers? Share your thoughts.
For instance, the deal would definitely change the mobile landscape. Google, which of course has its Android platform, would also become a mobile handset maker, if the merger goes through. With this in mind, one cannot help but speculate that Google could use Motorola to build all its flagship phones. Although Google makes it clear that it would run Motorola separately from Android, the speculation is still present.
“The truth of the matter is, when you have yourself a hardware company, and an amazing one at that, it’s going to be hard not to want to encourage them to create the best product out there,” said Bryan Gonzalez, the Director of Social and Digital Media Technology Labs at the Entertainment Technology Center at the University of Southern California.
What’s interesting is that other mobile manufacturers including HTC, Samsung, Sony Ericsson, and LG, have actually spoken out with praise for the acquisition. Gonzalez told us that these companies are committed to Android and want it to succeed, even at the expense of a competitor being bought by the platform creator.
He went on to say that the companies are hoping the acquisition will help Google make Android better, so that they, in turn, can become more effective when competing with Apple.
“By Google getting close with a hardware company, maybe Google will learn to appreciate the hardware side of it much more, and even be able to leverage better functionality in the future,” he added.
There have also been some questions raised in regards to the openness of the Android platform. Google has also said that it will keep it open, and while Gonzalez believes that it will for a while, he doesn’t know if it will be able to keep it open for the long term, especially with all malware issues that the Android app store has experienced over past few months.
With this acquisition, Google is also hoping to solve some of its patent woes. Through the deal, it would have access to Motorola’s existent and pending patents, which would help it avoid legal trouble from Apple and Microsoft.
“They’re really just trying to protect themselves from future litigation,” said Gonzalez.
The other part of this deal that has not been covered as extensively as the mobile side is the home devices and video solutions side of Motorola Mobility. Through this division of the business, Motorola makes set-top boxes for cable companies. For Google, this means that it could incorporate Google TV into these set-top boxes and potentially create a Netflix competitor.
The problem with this is that Google doesn’t have the same relationship with content creators that Netflix has. Gonzalez believes that the reason for this is, in part, because Google needs to find a business model.
“Up to this point, I think Google has been so focused on the technology that they really missed the business aspect of it,” he said.
In regards to how the acquisition would impact consumers, Gonzalez told us that the deal could be beneficial since it would likely encourage all the handset makers to produce better phones. He also believes it will pass regulatory approval because the mobile market would still be large and therefore, prices would still be low.
Do you think the acquisition should go through?