Here’s what Google becoming a handset maker means for Apple

By , May 22, 2012

Earlier today, Google CEO Larry Page took to company blog to break the big news: having obtained necessary approvals from watchdogs on both side of the Atlantic, the search giant has finally closed its $12.5 billion acquisition of the ailing handset maker Motorola Mobility in a move meant to “supercharge the Android ecosystem”.

The transaction will close by May 23 and is rumored to see Google laying off up to one-third of Motorola staff.

Motorola CEO Sanjay Jha is stepping down (not unexpected) and will be replaced by Dennis Woodside whom Apple tried to poach last year. The new CEO already promised “fewer, bigger bets”, meaning Motorola should streamline its portfolio to focus on a select few hero devices.

So, Googlerola is alive and the search giant is now officially a handset maker – one sitting on an enormous pile of patents. In fact, the search Goliath is now in a position to directly fight Apple’s allegations against Android makers.

Taking it all in, we analyze what repercussions – if any – this development potentially poses for Apple and its ongoing legal spat against major Android backers such as HTC, Samsung and, yes, Motorola…

Enter Google CEO Larry Page, 39, who co-founded Google along with brilliant engineer Sergey Brin back in 1998 in Menlo Park, California while they both attended Stanford University.

In a blog post, Page called Motorola “a great American company”. He then went on to explain the reasoning behind his company’s high-profile (and expensive) takeover.

It’s a well known fact that people tend to overestimate the impact technology will have in the short term, but underestimate its significance in the longer term. Many users coming online today may never use a desktop machine, and the impact of that transition will be profound – as will the ability to just tap and pay with your phone. That’s why it’s a great time to be in the mobile business.

And make no mistake about it, “Motorola will be creating the next generation of mobile devices that will improve lives for years to come”.

And how do we know Google means business?

Well, they also snapped up progressive industrial design studio Mike and Maaike which did work on the first Google Nexus phone. This acquisition indicates that Google is serious about perfecting Android to match iOS’s polish.


Google’s Vic Gundotra pulls up an anti-Apple slide at Google I/O 2011.

As Google’s acquisition is mostly around gaining Motorola’s 17,000 patents and with the news that they have now closed the deal, I asked patent expert Florain Müeller who runs the FOSS Patents blog to comment on a theoretical possibility of direct litigation between Apple and Google over Android infringement.

Here’s what he said:

Litigation between Apple and Motorola, as well as between Microsoft and Motorola, is already pending on both sides of the Atlantic. The only thing that has changed is that Google’s ownership of Motorola will complicate any settlements: while Motorola would only have wanted to take care of its own needs, Google has broader agenda.

So what happens if Google begins pushing Apple around with the ‘our way or the highway’ strategy?

If Google makes unrealistic demands, Apple and Microsoft won’t have a choice and will have to continue to enforce their rights.

So, how does this closing of the Motorola transaction affect Apple’s legal position?

Motorola’s patent portfolio isn’t particularly strong. This deal won’t enable Google to force the rest of the industry into comprehensive cross-licensing deals.

Also keep in mind that Apple is one of the constituent companies behind Rockstar, a company created to guard a portfolio of nearly 6,000 wireless patents that Apple, RIM, Microsoft, Sony and Ericsson bought in a high-stake bid last year from bankrupt Nortel for a cool $4.5 billion.

One-third of this portfolio went to Rockstar’s constituent companies and the rest was taken over by Rockstar itself, meaning 4,000 patents. Put simply, Rockstar is now a patent company that has the authority to sue companies that infringe on its patents.

And no, I’m not the first to liken Rockstar to a nuclear NORAD in patent wars.

Litigation aside, question remains how Google plans to go about making Android devices through its Motorola arm without competing with or enraging other Android backers.


The Motorola deal is meant to “supercharge the Android ecosystem”, Google says.

That will be a tough one to crack.

It dawned on some Android players that, seeing what was coming, have put contingency plans in place.

Samsung, for instance, which contributed to an estimated 40 percent of all Android phone sales in the first quarter, has long been pushing its own operating system called Bada. It will be merged with Tizen, another up-and-coming platform born out of Samsung Linux Platform operating system, a sign of consolidation on Samsung’s part.

Other vendors which bet exclusively on Android are flirting with Microsoft and some, like Taiwan-based HTC, are now in bed with Redmond. As you know, HTC has doubled down on its Windows Phone portfolio of devices.

As the industry re-shuffles around Microsoft and Motorola reorganizes itself as a Google-ran entity, both Apple’s iPhone and upcoming Windows Phone devices from Nokia stand a chance of slowing down the Android freight train, if not derailing it.

Eventually, give it a year or two, and the mobile space will be a three-horse race between Apple, Google and Microsoft, just as Nokia CEO Stephen Elop told reporters during a news conference in February 2011.

“It’s now a three-horse race”, he quipped.

As for Apple, its CEO acknowledged the three-horse theory during a January media and analyst call:

There’s a horse in Redmond that always suits up and always runs, and will keep running. There are other players that we can never count out. What we focus on is innovating and making the world’s best products. We’ll just ignore how many other horses there are. We just want stay ahead and be the lead one.

Research In Motion?

They’re already written off in my book.

So, what does this Googlerola biz mean for Apple?

Not much, as long as they keep their eyes on the ball and keep on delighting us with great iPhones.

Make sense?

No, you say?

Let’s hear your take down in the comments.

If you can’t get enough of this saga, you may as well want to check out these:

• Google blog post announcing “We’ve acquired Motorola Mobility”
• Bloomberg article explaining how Google is now a handset maker
• AllThingsD on leadership changes following the deal
• 8-K Form Motorola filed with the U.S. Securities and Exchange Commission specifying deal terms
Google blog post from August 2011 announcing intentions to acquire Motorola to “supercharge Android”
• Google press release announcing intentions to snap up Motorola
• 9to5Google article on Google agreeing to keeping Android open source for at least five years
• The Wall Street Journal coverage of China clearing the Motorola deal

Oh, and in case you didn’t read it, Larry Page made headlines this morning by slamming Facebook over their data policy which holds user data “hostage”.

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  • http://twitter.com/christodouluke Luke Christodoulou

    I’d love to see it become a three-horse race. If I were ever to move away from iOS it be probably be Windows I’d move to. Their design is gorgeous and I’d love to have that live home screen on my iPhone.

  • Paul Maniscalchi

    I think this is great news competition only means things will get better and better for the consumer and things will always stay fresh and new. I’m kind of curious what “googlerola” will come up with considering they will make the software and hardware compliment each other much like apple does.

  • Anonymous

    this is great news lets hope google can clean up android and give apple some real competition at last.. iPhone is the best but i would be nice to have other great options,…. motorolla made much higher build quality hardare than samsung..

    problem is that google need to stop flooding the market with crappie low end android phones.

    • sn0wbaLL

      Not everyone can afford the best. There is a market for low-end android devices, a big one.

  • http://www.facebook.com/antman217 Anthony Antunez

    They might finally be able to make a phone that runs Android the way its supposed to run and have their devices be able to update to the latest OS. This will also let customers keep track of the best Android handsets if they are coming straight from Google themselves… but this isn’t gonna make me leave iOS XD

  • http://twitter.com/JanoXDs Alejandro

    Google will make the handsets with a super modified version of android and never make that code open source. Its like all handset makers, they modify android but they don’t have to show code

  • http://twitter.com/jaded_doc Frank Provenzano

    Regarding the origins of Tizen and Bada, I have to correct your statement: “It will be merged with Tizen, another up-and-coming platform born out of Samsung Linux Platform operating system…” Fortunately, you reported the Linux origin correctly, but Tizen was actually an extension/continuation of Meego OS, which was a continuation of Nokia’s ill-fated Maemo OS, a true mobile operating system unlike iOS or Android, for that matter. Bada has nothing to do with Tizen. The only connection between the two is that Samsung now has a developing role in Tizen. The Bada OS was more of a feature phone operating system.
    Bada features will be integrated into Tizen to make the user experience more consistent with previous devices running Bada. Please, do a better job of fact checking before putting together an article.
    I recognize that as a Linux user/enthusiast/developer, I can be perceived as condescending from time to time. You being a Mac OSX (our BSD derived cousin) user/enthusiast/tech writer have a duty to educate Mac users, which are unequivocally, the most technologically illiterate of the UNIX-based operating system users.

    • sn0wbaLL

      Yup, totally agree. The writer obviously didn’t do the research

  • http://www.facebook.com/luisreyespr Luis

    I tend to forget how competition affect me economically and with the addition of new features. I also love the anti-Apple slide, I wonder if he ever heard: “You are what you eat.”.

  • http://twitter.com/x_rus_x Vitaliy Anonymous

    I am actually hoping that Apple will start eating the dirt that it made Google eat.

    • Anonymous

      Agreed. CAN they win the final rounds of this patent war with Steve gone?

      (Don’t think so) We’ll have to find out.

    • http://www.facebook.com/people/Steve-Johns/1034127348 Steve Johns

      The only things Google have been “consuming” lately has been stolen from Apple.

      • http://twitter.com/x_rus_x Vitaliy Anonymous

        Hmm, have you watched, “Pirated of Silicon Valley”. You should learn some history how Apple was stealing from IBM. Even now Apple takes idea, as far as taking the notification center idea from Google.

  • Anonymous

    TES, finally! Hopefully google can clean up android a little bit.

  • Jeri Cho

    I would name the phone Gorilla for its robustness or G-String for its simplicity, minimalist and sexiness.

  • http://twitter.com/Kira_RaiGek Carlos Arrieta

    Random ? What’s better in everyone’s eyes full force tweak or retinapad which is better. Thanks everyone.

  • Anonymous

    Google is a paid search company, that’s it. They will never create a handset to compete against apple, no chance. Not their gig, not their forte. Furthermore, pushing the android handset makers away from android will blow the whole ship up. google has nothing to lose, since they can’t monetize android anyway. Apple will be the big winner however it plays out. Bring it!

    • Ronald Weaver

      Yeah remember that peice of shit g1, made around the same time as 3Giphone. It’s shit. Nuff said!

      • Anonymous

        Only problem with your comment is that Google didn’t make the G1. HTC did.

  • http://www.facebook.com/people/Thomas-N-Shanna-Bernauer/100002948594321 Thomas N Shanna Bernauer

    There is a new sheriff in town!

  • http://www.facebook.com/people/Steve-Johns/1034127348 Steve Johns

    I still think this is similar to the comparisons between VHS and Betamax in the 80’s. Apple IOS is the far superior product but Android is being pushed on the masses by clever marketing.

  • Anonymous

    Look out apple NOT

  • http://twitter.com/rithvikvibhut rithvik

    Windows phone 7 is will always be the best!!!

  • Anonymous

    Few things:

    -No, it isn’t a three-horse race. While the new Windows Phones have potential, they haven’t really done anything special in terms of sales. As of right now, it’s pretty much just Apple and Google running the smartphone market.

    -Google creating a line of phones through Motorola won’t have much, if any impact on their competitors. They will continue to open source the Android OS. The purchase of Motorola doesn’t suddenly make Google a hardware company. Google only wants you using their software (to generate ad revenue), and I doubt they care where you get it. Also, in China at least, keeping Android open source was a condition of the merger approval.

    -Other vendors aren’t “flirting” with Microsoft. HTC was making Windows mobile phones before anyone knew what an Android was. Ditto for Samsung. Although they have both profited greatly thanks to Android, at no point were they exclusively handcuffed to it.

    -IMO, the end result of all this will be Google creating a “Google Phone” line or some such using Motorola hardware. This will allow them to push high-end Android devices without the bloatware, and control the whole customer experience a la Apple.

    Yes, this will eat into some of their partners sales, but they will get over it. The need Android way more than Android needs them. Still. I expect Samsung and HTC will expand their Windows phone offerings, but that won’t do much for Microsoft. What’s holding the Windows Phone back isn’t the hardware. Most people don’t pay attention to specs anyway, just ask your average iPhone owner how fast the proc is.

    It’s the software and eco system.

    • http://www.facebook.com/profile.php?id=100003704536426 Paapu Poojari

      well said..

  • sn0wbaLL

    Google will not make android exclusively for motorola. They’ve already stated that. Samsung have stated that bada/tizen will not be in competition with android.