Real Kato Blog: Google to Buy Motorola Mobility

Google announced today its intention to pick up Motorola Mobility for $12.5 billion. In a release, Larry Page explained two reasons for the purchase: to "supercharge" the Android ecosystem, and to strengthen Google's patent portfolio.

Let's dig a little into this.

By picking up a hardware vendor, Google can now push for the same kind of hardware-software integration that Apple has, with devices that take advantage of the latest and greatest Android features. This cannot be good news for HTC and Samsung.

Although Page insists that Motorola will be run as a separate business, and that the unit will be just another Android licensee, that simply cannot be true. There would be no advantage to having a hardware development team in-house if not to have it push out integrated hardware designs faster. With this purchase, it seems clear that Google believes third-party hardware vendors don't have the ability to keep up with future developments quickly enough. You can bet that from now on, every time Google announces some new Android feature, it'll be supported first on Motorola handsets and tablets, and the other guys will be scrambling to catch up.

The second part of the acquisition has to do with Motorola's large mobile patent portfolio. Having lost out on the Nortel patent auction, this is probably an even more important aspect to the purchase.

Here again, HTC and Samsung stand to be losers. Apple hasn't been suing Google over patents; it has sued Motorola, HTC, and Samsung. Motorola will now get Google's might behind it (though if Motorola's patents couldn't protect it from Apple on its own, it's questionable whether ownership by Google will really help). But HTC and Samsung will be left out in the cold, unless Google attempts to intervene in Apple's lawsuits against them... and why on earth would Google do that?

What's important to keep in mind is that HTC and Samsung will now be direct competitors against Google in the hardware business. Every handset sale for Motorola will be a loss for someone else. Sure, some of that business could come from Apple, but Motorola handsets compete first against other Android handsets.

Unfortunately for HTC and Samsung, they're stuck. They've put their chips in with Android and it would take a huge investment to do anything else. They're the Compaq and Tandy of the PC world, except in this analogy, Microsoft would have bought Dell to hasten their demise.

But you know... don't be evil.

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