All right, let’s see how this is supposed to work. Google releases the Android OS under an open source license, meaning that any handset maker can download the code and use it to power their smartphones. Only it hasn’t quite worked the way they expected. Each handset maker and wireless carrier is free to change the user interface and even the bundled software. Customers aren’t even assured that they can get the latest OS updates, even if they contain important security fixes. So you can say that there is no single Android OS branding that customers can count on.
In a curious decision, Google this week announced a $12.5 billion deal to acquire Motorola Mobility, a fading mobile handset maker. This will give them, according to revised estimates, some 24,500 patents, many network related. It means that Google is spending over $510 thousand for each patent. But it’s not certain how many of those patents will actually impact the current round of smartphone patent portfolio fights.
While the fallout from this move is only beginning to emerge, clearly Google is taking a drubbing. They don’t have any experience whatever in building hardware. Their previous attempt, the Google Nexus One smartphone, assembled by HTC, was an abject failure. At the time, Google was roundly, and justifiably criticized for having no clue about providing customer support. It’s not that you can expect them to fare better with Motorola Mobility, which sells products to wireless carriers and, by dint of their set top boxes, cable companies. It’s those customers who provide most of the technical support to end users, so Google gains nothing from this transaction.
The biggest problem of all involves Google’s other Android OS partners, particularly Samsung and HTC. Sure, they have already claimed that they are pleased with the acquisition, and are assured of continued access to Google technology. At least that’s what they say in public. Privately, you have believe that executives throughout these companies are using such terms as “dirty-so-and-so” and worse to describe Google’s clear betrayal of trust.
Certainly betraying one’s partners is nothing new. Microsoft did that to their PlaysForSure licensees when they created the failed Zune music player. When they couldn’t mount a workable defense against the iPod, they attempted to imitate Apple’s infamous walled garden, with tight integration between hardware and software. It didn’t work.
No doubt Google wants to accomplish the same thing, making Motorola Mobility their first among equals Android OS partner. But you can bet that other Android licensees are looking for alternatives even as I write this column.
Some might consider Windows Phone 7, although that OS hasn’t really caught on. Besides, Microsoft is lavishing their attention — and billions of dollars — on Nokia. There’s no chance other handset makers will get a fair shake.
There’s already a published report that Kim Soon-taek, the head of the Samsung Group, has already ordered his employees to expand a development push for Bada, their home-grown mobile OS. If Bada appears on more and more Samsung smartphones, it’ll come at the expense of Android. Besides, that way they won’t have to continue to confront the wrath, and ongoing intellectual property lawsuits, from Apple. That assumes Bada is free of potential patent issues.
Sure, there’s no guarantee that Bada will succeed in the marketplace, but that move might seriously erode the Android OS’s market share moving forward. If other handset makers cut their losses, Google might find that Motorola Mobility is their only credible licensee. But at least they’ll earn real profits from Android OS, rather than depend on customers clicking targeted ads to generate profits. Or maybe not, since Motorola Holdings has been drowning in red ink of late.
Meantime, there is that report that HP is discontinuing the WebOS, and, of course, the poor selling TouchPad tablet. WebOS, acquired when HP purchased Palm, hasn’t done very well, so maybe it’s not a big deal. HP is also planning to spin off their PC division, a source of stagnant sales and slim profits. And some believe the RIM BlackBerry PlayBook may be next on the chopping block.
So where does all this leave Apple? Well, if the various handset makes cannot coalesce around a single OS, and offer loads of incompatible mobile gadgets instead, the iOS will shine brighter than ever. And if you count the sales of the iPad into the overall figures of mobile computer sales, Apple is number one with a bullet around the world.
Of course, how Mac sales are faring won’t be certain until the quarter nears an end. Yes, there is one industry analyst who polled the sales over a weekend from four university stores and imagined that Mac sales are plummeting, but there’s no evidence such a thing is happening elsewhere.
Meantime, it doesn’t appear that this week’s developments are going to have any immediate impact on the patent-related lawsuits. Sure, they are huge and expensive distractions to a company actually doing business. But as long as the patent system is broken, things won’t change.
No doubt Google hoped to leverage all those Motorola Mobility patents to mount a defense, and rely on cross-licensing agreements to keep the wolves at bay. But few expect that acquisition, when it closes as expected next year, is going to accomplish anything but halt the growth of the Android OS. How could it be otherwise?
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