Why Google’s purchase of Motorola Mobility is a white flag of surrender, and how Apple won the future of tech

“This morning, Google made a bold move and purchased Motorola’s mobile business for $12.5 billion,” John Brownlee writes for Cult of Mac. “In doing so, Google brought the hardware design and manufacturing of Android devices in-house, just as Apple has always done with its products, starting with the original Macintosh and continuing all the way to the iPhones and iPads of today.”

“This is nothing short of a capitulation,” Brownlee writes. “By purchasing a smartphone maker, Google has all but admitted that it needs more than just a free operating system and loads of partners to compete with Apple: they need to duplicate Apple’s successes by totally controlling both the hardware and software of their devices.”

Brownlee writes, “It’s not just Google that has come to this conclusion. Microsoft recognized the same thing earlier this year when they partnered with Nokia to make handsets designed from the ground up for Windows Phone 7. And HP — long a company that has slapped other companies’ operating systems on their machines — purchased Palm for its webOS mobile operating system last year.”

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“Noticing a pattern? For years, Apple was the odd duck out while Microsoft sold a flavor of Windows for every gadget that would run it. Apple was laughed at, while people like Michael Dell suggested that Apple should either switch to Windows or fold up shop,” Brownlee writes. “Who’s laughing now?”

Much more in the full article – recommended – here.

MacDailyNews Take: Apple leads. The rest follow. As usual.

 

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Related articles:
Apple’s vertically integrated Mac could make interim Wintel model look like a detour – April 25, 2008
Apple has proven that vertical integration works better – October 24, 2006
Microsoft tries to match Apple’s vertical approach – October 11, 2006
Apple was right all along: vertical market quality trumps horizontal market woes – April 30, 2006

27 Comments

  1. There is no surrender at this level of insanity. Just more of “I’m going to continue throwing sh#t against the wall until something sticks, or I just plain run out of sh#t.

  2. I think he misses the point: had Google had the patent portfolio that Apple and Microsoft have, they never would have bought Motorola. They didn’t buy them for their hardware, they bought them in spite of their hardware. That Motorola manufacturers Android phones is actually a disadvantage of this deal. All they wanted were the patents- they will let Motorola run as a independent subsidiary. Yes, Motorola will benefit from early inside knowledge, but Google still believes in the Microsoft model of separating the hardware from the software for variety in the market. Obviously, they haven’t learned anything (at least not yet) from Apple.

    Yes, Apple’s way is the right one. But it’s more than just integrated hardware and software. Apple’s success is also heavily based on the fact that Apple takes huge chances (first to use USB, kill the floppy and now killing the CD/DVD). No one else in this industry takes these kinds of chances, which is why they will always follow and never lead.

    1. If it were left up to Windows, desktop computers would have every legacy port and drive option from over the years. You’d still be able to use your 8″ floppy media and serial and parallel port printers. Insane. Progress marches on. Get with the program.

      In my thirty some odd years of computing, I’ve seen a mess of standards come and go. I quickly let them go one by one lest I also become left in the past. There’s just no point in fighting change. As far as I’m concerned things have changed for the better in the world of home computing.

    2. The same patent portfolio that got Motorola nowhere. Your assumption is that google is somehow smarter and can make better use of the patents.

      They’re not a hardware manufacturer and never have been. Clueless google are hoping by metamorphosis into becoming a serious competitor of Apple Computer. I honestly think Dell would stand a better chance. At least they’ve had decades of experience in the hardware game under their belt.

    3. They couldn’t outbid AAPL/MSFT/et al 6 weeks ago for $4.5B and now they’re ponying up $12.5B for the patents?

      What has changed for them in that time? I agree that the patents are a huge driver for deal, but throwing aside the h/w side leaves them paying nearly 3X now than what they refused to pay 6-8 weeks ago.

      They can divest the h/w side and hope to get the total cost down (I’d humbly suggest they consider posting it on EBay…)

      1. Nobody was bidding against them this time.

        The thing is, even if Google tells its hardware partners that it will keep supporting them, it’s going to be very hard for HTC, Samsung, etc. to believe that. This is really going to open the door for other OSes to come on the scene, and then be killed off one by one.

        I can see HP getting more traction here as the Android makers become more and more fractured and less willing to remain tied only to Google.

      2. I heard that if you back out MM’s cash, their licensing revenue, their hardware, radio and other businesses, that Google is getting MM’s patent portfolio for ~$4-5 billion.

  3. Ok, buying motorola solves his issues with hardware making…
    Now they just need to solve their problem of HARDWARE DISING since motorola only copies other companies (since the post RAZZ era).
    Also, they need to solve their content problem.. then they need to solve their distribution problem… then they need to solve their supply problem… then they need to solve their lack of innovation problem… then they need to solve they lack of vision problem… then they need…… wouldn’t be easy for them to buy 12.5 Billion on apple shares?

  4. It is very likely that Google bought Motorola Wireless only for the patents, much like the Louisiana plantation owners of 19th century used to buy French wine just for the huge ceramic jugs it was shipped in. However, unlike them (who dumped the wine and used the jugs), Google will very soon discover the value of having their own hardware maker, and will begin to use it.

    HTC, LG, Samsung and others have every reason to be worried by this, regardless of what Google may be telling them now (and even thinking). There is absolutely no way Google will pass on the chance to give a leg up to their own hardware, at the expense of the competing makers.

    PlayForSure debacle is fresh enough in everyone’s memory to teach them all valuable lessons.

    1. I think you’re probably right. It is worth noting that this hardware manufacturer, when competing with Apple who is the new kid on the block, was losing money selling android phones, while Apple was taking in half of the profits in the industry.

      I really don’t think Larry and Sergey can do a better job than the previous managers of motorola, whose background is in making handsets profitability.

      1. I think Predrag’s analogy with the ceramic jug the French wine came in would hold water if the patent trove that Google obtained along with the Motorola purchase were actually worth something. Most of those patents would have been licensed out to other sub-assembly manufacturers (Broadcom, Marvell, Thompson, Infineon) and indirectly to Apple when they purchase the component, through Foxconn, for incorporation into the iPhone so the act of extracting value from the patent pool may be more apparent than real. Given how delusional David Drummond is I wouldn’t be surprised if he deluded himself and Google’s board as to the worth of Motorola’s patents which could turn out to be a red herring.

    2. Google has not shown much integrity with it’s Android play. Not only did they stealth idea when part ofApple’s board, they then went on to make a total mess of the release strategy. HTC and Samsung would be well warned to watch their backs.

  5. This is great news IMO. I look forward to seeing Android running without lag on hardware made for it, the next (2nd) version of Windows Phone, and how Apple will respond to keep on top.

    All “good things” as Martha would say.

  6. Apple already has deals in place for the Standards based FRAND patents that Motorola holds for wifi 802.11 and 3G, etc. The nortel portfolio is stronger than Motorola for 4G/LTE. It does not makes sense that android bought Moto just for the patents – they will stomp on their partners toes.

  7. So great to see this happen. With FUD in the market about Android and RIM, this leaves a perfect opportunity for Windows Phone to grab some serious market share with the new Mango release. In a year you Apple sycophants will be once again all freaked out about Microsoft’s dominance in a market Apple emblazoned a path on. Thanks for doing all the hard work!

  8. so let’s sum up… Motorola, a company that has publicly stated that they are working on their OS has been bought up by Google to ensure that they continue to use Android? Isn’t this considered a form of anti-competitive behavior? How does a company maintain it’s monopolistic share of a market? Did Apple buy up EMI or Warner to ensure iTunes maintains a monopoly position in digital music?

    However, I must say, how does buying up a company with losses exactly help you out?

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