Google Says ‘Hello’ to Moto

Posted on 24 August 2011

In the Auto-ID industry there is no bigger hardware manufacturer of rugged mobile devices than Motorola Solutions Inc (MSI), a spin off from Motorola Inc. MSI’s business is split into two main segments Government, including sales of two-way radios and public safety systems and Enterprise which markets Auto-ID products including bar code scanners, mobile computers, wireless network systems, RFID readers and writers and OEM scan engines.  To give you an idea of size, MSI Enterprise sales worldwide were $2.7bn in 2010, 16% of that figure was accrued in Europe.

Back in March this year, my blog entitled “Windows Mobile 6.5 or Android?” questioned if the major manufacturers in our industry would utilise the Android operating system, obtained by Google in 2005, which is developed together with the Open Handset Alliance, and issued under a free software licence. To date, only Motorola’s Xoom tablet product employs Android, in this instance the ‘Honeycomb’ version designed specifically for tablets.  Honeywell have made a recent announcement launching its Developer Program for Android, suggesting it will be incorporating the OS in its new products. However, other manufacturers including Intermec, Psion and Datalogic have yet to integrate Google’s OS into their product line.

In news somewhat unrelated to the rugged mobile computer market but pertinent to the mobile phone arena and the wider software issues raised here, Samsung is reported to have hired an Android specialist hacker, further indicating the potential market impact of Google’s OS.

Given Google’s history with Android, the customer base that has grown on the back of the free software licence and the absence of an alternative from Microsoft, it’s understandable that Android has become widely adopted in the smartphone market. Many of the manufacturers, which are founding members of the Open Handset Alliance, including HTC, Samsung, LG, T-Mobile and others, have put their faith in the search engine giant’s operating system, in part because Google was not a hardware competitor. Now however, a new day has dawned as Google has purchased Motorola Mobility Inc. (MMI), one of the top five global mobile handset manufacturers. This move has instantly put Google into the hardware market, openly declaring itself a member of the competition.

So why would Google pay a premium of over 60% for the shares of MMI, if it was likely to hack off its customers and take the business into an area outside its core competence? The answer, we’re told by Google, is to protect its Android customers by acquiring MMI’s impressive patent library, rumoured to be over 17,000 strong with a further 7,000 awaiting approval. So armed, Google will be better placed to defend Android customers from patent suits originated by Apple, Nokia, RIM and HTC. Google further suggests its customers are ‘happy’ with the acquisition, and has suggested that it will operate MMI at ‘arms length’ and may even sell off the hardware business.

Some industry watchers suggest Google is really attempting to build an integrated ‘ecosystem’ for Android, copying Apple’s iPhone and iPad success through controlling the hardware, software (iOS) and delivery of applications through app stores. The concept of a Google controlled mobile with Android operating system, predominantly (one would assume) displaying a Google search screen with a Google+ social networking icon, may be attractive, but this road is littered with corpses. Given the experience of others that have tried this approach, including Microsoft with Zune and the Kin phone, RIM with Blackberry, Oracle with Sun, HP’s problems of Palm and more recently with WebOS, it’s all pointing to the difficulties of an integrated business model.

The only company that’s succeeded with the integrated model to date is Apple, although some say Amazon are hot on their heels with their Kindle product. Can Google emulate Apple and succeed in creating an integrated business model, or will they end up like Microsoft and their Kin phone?

I’m no financial advisor, but as they say in financial circles, I’m short on Google.

What do you think of Google’s acquisition, good move or, end in tears?

Feel free to leave a comment below. Or, alternatively if you’d like to discuss a possible deployment of a mobile solution for your business, drop me an email or call the office on +44 (0)845 345 0808.