Is it a play at patent acquisition? – absolutely. There's plenty of data to confirm that protection from patent litigation is top-of-mind in the mobile industry now. Apple, Microsoft, Oracles acquire Nortel's patents, Google responds with Motorola Mobility's arsenal of intellectual property. It seems like everyone is suing everyone in the mobile industry, and accumulating a stronger patent portfolio that allows for leverage in cross-licensing arrangements and royalty negotiations is priceless. After all, Microsoft already makes a decent living out of licensing their mobile patents to Android device manufacturers.
But this is also a play at the de-fragmentation (consolidation) of the Android experience by creating an ecosystem meant to encourage application development. The future of the mobile landscape seems to be predominantly modeling itself around walled ecosystems that exist between Device OS, Device Hardware, and Application Delivery Vehicles (“App Stores”) - we see this hold true throughout the industry right now:
Google/Motorola + Android + Marketplace
iPhone + iOS + App Store
Nokia + WP7 + Windows Marketplace
HP + WebOS + WebOS Software Store
Nook + Android + Nook App Store
Cisco Cius + Android + Cisco App Store
RIM Blackberry + BlackberryOS + App World
Most notably absent as part of these new mobile ecosystems are the carriers themselves, and I am certain we will see responses from the carriers to embed themselves further into the value chain. This may look more and more like the Comcast/NBC-U world. Maybe AOL Time Warner had it right consolidating access and content, but were just too early to the game? Anyone have thoughts as to how carriers insert themselves into this model?
While others are doing this successfully in verticals, such as eReaders (B&N) and enterprise tablets (Cisco), there has been no entity, until now, step up to consolidate the Android application development platform for phones and tablets. This is where Google’s move is a stroke of brilliance (and littered with risk!).
There are many entities attempting to penetrate the walled garden ecosystems unilaterally – such as Amazon, Samsung, HTC. Can these vendors be successful with their current strategies?
How does the Google/Motorola alliance impact other Android device manufacturers? I think you might find these players largely excluded not because Google makes some fundamental preference towards (or release of) Motorola Hardware (the “GooglePad” or the next Nexus smartphone), but instead because App developers make fundamental preferences towards walled garden ecosystems as a path to monetize their software while minimizing development costs. Samsung and HTC are encracing the acquisition news in the media. Does anyone have opinions on how they are responding behind closed doors?
While “open” resonates with the industry, customer buying practices continue to point towards excessive consolidation into closed ecosystems for the benefit of simplicity and useability. Take note of the lines at the Apple Stores in September and November (depending on which rumor you read on iPhone 5 and iPad 3), as millions of people around the world line up in support of this model once again...
NOTE: While the acquisition of Motorola Mobility does provide Google with further access to the Set Top Box business, I've focused, for this blog, solely on the mobile implications.
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