What Google Gobbling Motorola Mobility Means For The Way We Think About Smartphones

While the tech world focuses on the strategy behind Google’s acquisition of Motorola Mobility, we take a look at what the move means for the way we think about our smartphones, and the way they work.

What Google Gobbling Motorola Mobility Means For The Way We Think About Smartphones


Google’s $12.5 billion acquisition of Motorola Mobility means the people who decide what happens when you push a button on your smartphone will now also decide where that button goes. The same way Apple does. And RIM. And HP with WebOS. 

It’s a step toward making mobile devices synonymous their operating systems. We say, “I have an iPhone,” and not, “I have an iPhone running iOS.” With Google’s purchase of Motorola Mobility, “I have a Google phone” might become a common phrase–it certainly rolls off the tongue easier than, “I have a Motorola phone running Android.” Especially if Google ever becomes the primary maker of Android smartphones and tablets.  

We’re not quite there.

And, in fact, the biggest consequence yet determined of Google’s acquisition is whether handset makers such as Samsung, HTC, and others will choose to stick with Android and compete with Google’s now in-house brand (Motorola Mobility). If not, they could develop their own, niche operating systems instead. Or, more likely, expand to Windows Mobile–or possibly HP’s WebOS–the industry’s free agents. 

However it pans out, here’s how the Google-Motorola pairing will change the way we think about our smartphones, their brands, and what we expect them to do. 


Going Vertical

“Everyone is figuring out that if you want to survive, you really want to control the experience end to end,” Phil McKinney, president and CTO of HP’s personal systems group, told Fast Company recently. “The ability to control both the hardware platform and OS is absolutely critical.”

In other words, when operating systems (OS’s) are left in the hands of third parties, the device makers lose much of their ability to control core functionality. In the case of PCs, manufacturers license Windows from Microsoft; in mobile, the default has become Android, which was developed for a slew of smartphones and tablets from Samsung, Toshiba, and others.

Outsourcing Android to a handful of device makers has created little differentiation in the market, especially in the tablet space, where it’s often hard to tell Android-based tablets apart. “In my observation, if you look at all the Honeycomb tablets, they’re all the same,” says Ben Bajarin, a consumer tech analyst at Creative Strategies who recommended that Google buy Motorola a week before the actual acquisition. “Why would I buy one, unless it’s cheaper than anything else?”


Not only are Android doppelgängers comparatively priced, they’re also generally reviewed less positively than Apple products, which lead the space. “I think about it a lot like I would cars,” Bajarin says. Imagine if Apple were the Mercedes of the tablet world. Instead of there existing all types of competitors–BMWs, Toyotas, Audis, Fords–most competitors in the space essentially run on the same engine; the only differentiation the manufacturers provide is the shape of the car, or the number of doors it has, or the type of windshield wipers. Google allows for OEMs to customize its OS to some degree–just look to HTC’s Sense UI, Bajarin says–but nothing that could address core functionality the way Apple can with its iPhone.

More and more, however, device makers are moving toward the strategy Apple has perfected: controlling both the hardware and the software it runs on, which allows for better optimization and a more tightly controlled user experience. RIM has mimicked this strategy by purchasing QNX, which is now developing RIM operating systems to run on BlackBerrys and Playbook tablets; HP mimicked this strategy by purchasing Palm last year to develop WebOS for its Pre smartphones and TouchPad. And now, Google, which already developed its own OS with Android, is taking a reverse approach to reach the same end: purchase a device maker–Motorola Mobility–to control the experience through-and-through.

Bajarin believes the industry is heading toward these single hardware-software optimized solutions, as we’ve begun to see with iPad/iOS, TouchPad/WebOS, and Playbook/RIM. “This is what we call the trend of verticalization,” he says. In other words, device retailers, like auto dealerships, will soon be able to ask consumers, as Bajarin says, “Do you like BMWs? Mercedes? Toyotas?”

Google’s Conflict of Interest

The acquisition of Motorola has also created a big conflict of interest for Google and Google’s mobile partners. Before, Google was a third-party provider of software for companies such as Samsung, Toshiba, and Motorola, which create devices that run Android. These companies’ products–the Samsung Galaxy Tab, Toshiba Thrive, and Motorola Xoom–competed with each other and Apple for consumer attention. But they never competed against Google. Now that Google has its own competitor in the device space, it makes any other device maker’s prospects seem grim. “That’s why I didn’t think Google would do this, because it then creates competition with those who are your partners,” Bajarin says.


Though Larry Page stresses patents as central to Motorola’s acquisition, there’s undoubtedly an underlying intention here to enter the device space. “If there’s any question about Google’s motivation to own a handset maker rather than just a portfolio of patents, consider this: InterDigital, a licensing company that owns some 8,000 wireless patents and has another 10,000 patent applications being processed, has been up for auction,” reported Dealbook‘s Andrew Ross Sorkin on Monday. “Many industry insiders were sure that if Google were serious about acquiring a portfolio of patents, InterDigital would be its target. The company’s market value is only about $3 billion and it doesn’t come with all the baggage of Motorola’s handset business.” In other words, Google seems to want to make, not just run, phones. 

The Droids of Android: LG, Samsung, HTC, Sony Ericsson

When the news hit, Google smartly coordinated with its mobile partners for support. The central talking point: We welcome Google’s commitment to “defending Android,” a phrase parroted by the presidents or CEOs of most every major Android partner including Samsung, Sony Ericsson, HTC, and LG Electronics.

Don’t let the PR fool you. “These guys aren’t happy Google is buying a competitor, but what are they going to say about it right now? ‘Fuck you, Google, we’re ditching Android!’?” wrote TechCrunch’s MG Siegler. “Given their massive commitments already in place, such a move could force any of these companies into the ground.”


How should they be reacting outside the public eye?

“First, they should be concerned,” Bajarin says. “If you think about what it takes to go and develop software, the hardware company must talk to whoever is developing the operating system very early in the design cycle. That means you’re sharing hardware specs, you’re sharing so many intimate details. So now if you’re HTC or Samsung or LG, you’re sitting there thinking, ‘I’m going to be talking to Google about the next Galaxy tablet,’ and ‘Oh by the way, they own a company that also makes hardware.’ Now if I’m doing something unique and proprietary, they can just take that and build it into their next device. You don’t want to give away that level of information [to a competitor], yet that level of information is required if you intend on building a very good experience with that software. That’s where this gets real sketchy. It’s a tricky situation that I think will lead them to alternates [of Android], whether that’s Windows Phone or [HP’s] Palm WebOS.”

It could also push them to make their own operating systems, Bajarin adds. Which leaves open the possibility of phone offerings with hardware-software integration from Google, Apple, RIM, and HP, as well as an array of more focused or niche hardware-OS combos, too.

HP’s WebOS Play


As Business Insider has pointed out, Android’s entry into the device space could give HP an opportunity to become the new third-party OS for device makers. The issue is that HP has the same conflict of interest as Google will soon have: devices in the space that would serve as competitors. If HP were to license WebOS to any smartphone or tablet makers, they would inevitably compete against HP’s Pre smartphones and TouchPads.

“For them to be successful licensing WebOS, they would need to recognize that as great as the hardware business has been to HP through the years, that their software and services strategy is probably a more lucrative approach,” Bajarin says. “Within HP, there needs to be a discussion of how important their hardware business is.”

In other words, in order for WebOS to become the new Android, HP would have to end its strong push for hardware. But HP has never expressed an interest in eliminating their hardware business. Rather they’ve aggressively pushed to make the combination of hardware and software central to the company’s mission, as CTO Phil McKinney has stressed. Still, a report out Wednesday indicates the TouchPad is struggling to attract consumers, even with a deep $100 discount–Best Buy has managed to sell only 25,000 TouchPads, of the 270,000 in its inventory, according to AllThingsD

Although CEO Leo Apotheker has indicated the company might license out WebOS, it’s clear HP has no interest in licensing it the same way as Google did with Android. “If we were to ever venture into doing [WebOS] with someone else’s hardware, like our CEO has said recently, it would have to be a partnership,” Richard Kerris, VP of worldwide developer relations for WebOS, told Fast Company recently. “It would have to be someone that could bring the same kind of experience to the market [as HP] … to just license ourself out to everyone–that is a short-term look at success–it’s not a pleasurable experience for the customer, and it’s certainly not one for the developers. Now [with Android], developers have to go buy all these devices to test, and nothing is consistent–it just creates this huge, huge dilemma for them.”


But it’s unclear what that “partnership” would entail, and whether OEMs would be interested in relinquishing so much control (again) to a competitor in the field.

Microsoft, And the Need for a Neutral Third-Party

Suddenly, Microsoft has become the only player in the OS space without a conflict of interest. With Windows Mobile 7, a slick operating system that has seen little traction thus far, Microsoft has the opportunity to do what it does best, and has done successfully for decades: license its software and services out to companies such as Toshiba and Samsung.

Microsoft might see two possible developments here. It can either hope Android’s acquisition of Motorola Mobility leads to more phones running Windows Mobile, as some have suggested, or it can follow down the same path as Google, HP, RIM, and Apple toward controlling its own hardware and software. “Prior to this, Microsoft may have been going down the path of buying Nokia because they understand well the need for a hardware-software ecosystem,” Bajarin says. “Again, if they do end up doing that, they’re going to have this hardware-platform conflict, too, at which point in time if you’re HTC or LG you’re kind of like, ‘Now what do I do?'”


But since Google’s acquisition, Bajarin is less sure Microsoft would tumble down that route. “There needs to be a neutral third-party,” he says. “I think the neutral third-party wins. Whoever can provide that software ecosystem that can be diversified across a plethora of consumer products–again, it could be some [OS] that we don’t even know about yet.”

BlackBerry Who?

In this new mobile landscape, it’s difficult to figure out where RIM fits in. The company has been consistently losing market share to competitors, and has fallen behind in software and hardware innovation. With Google’s acquisition of Motorola, RIM is in an even worse position, and may be forced to sell or align with a larger company, said IDC program director Will Stofega, in an interview with Bloomberg on Tuesday.

“Now that Motorola has a big war chest behind them, Research In Motion has got to watch out,” Stofega said. “They are in no man’s land at this point.”


Further Fragmentation

Before mobile developers had to worry mainly about developing for iOS and Android. Then they had to worry about Android’s fragmentation, developing for the many iterations of the OS on endless amounts of devices: Froyo, Gingerbread, Honeycomb. And now, as the industry continues to head to an integrated hardware-software solution, developers may have to worry about optimizing experiences for products and operating systems from Apple, Google, RIM, HP, Microsoft, and more if others device to enter the game.

“I don’t think the ecosystem can support six operating systems, unless it was easy to make cross-platform software that developers could support,” Bajarin says. “If you don’t have apps, a platform is just not attractive to consumers. We know with Microsoft and with WebOS, if there are no apps, it’s not interesting; and I think that’s the hardest thing for HTC or Samsung, if they just decided to do their own thing. We’d all be like, ‘Where are the apps?'”

Sources tell Fast Company that carriers are especially excited about adding more competition to the market, and taking it beyond a two-party ecosystem dominated by Apple and Google. More operating systems will make a carrier more appealing, Bajarin says–that is, if they offer more platforms on their network, they could potentially attract more customers. Additionally, adding more devices and operating systems to the industry, he says, will give them the opportunity to create better tiered packages.

“They are very, very interested in having more than just a two or three horse race,” Bajarin says. “They want to be able to create more custom packages. Maybe leave the iPhone as premium, have some other devices as mid-tier, but then also have low-end devices that are still smart, have access to their services, and still have software and apps.”


But perhaps the biggest winner of this new mobile landscape is the consumer. The more operating systems out there, the more device makers looking to gain an edge in the market, the more competition there is. “Anytime we get that level of competition–it’s healthy for the consumer,” Bajarin says. “The bottom line is that once the market matures, people become very, very particular about what they want , and it becomes about making sure there is a breadth and depth of consumer choices covered. And that’s where we’re moving to.”

[Image: Flickr user Marco Nedermeijer]

About the author

Austin Carr writes about design and technology for Fast Company magazine.