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Motorola's Identity Crisis

Posted by Soulskill on from the coulda-just-bought-a-ferrari dept.

An anonymous reader writes "An article at the NY Times discusses the awkwardness of Google's recent purchase of Motorola Mobility, an acquisition widely thought to be motivated by Android patent concerns rather than a more straightforward business plan. From the article: 'While industry analysts and insiders say the rationale makes sense, they also say it leaves Motorola in an unusual position. ... Heightening the uncertainty is that the companies involved, both of which declined to comment, are in some ways as different as two technology companies can be. Google makes Internet services and software, thrives on high profit margins and distributes its product using giant data centers. Motorola makes hardware, has modest margins on a good day and moves its products on trucks and airplanes and through brick-and-mortar stores. ... "It's like, thanks for everything you did in the 20th century, but you're being bought by a search engine," said Roger Entner, a telecommunications industry analyst and founder of Recon Analytics, a market research firm. He added, "Nobody ever buys a company and leaves it alone."'"

20 of 135 comments (clear)

  1. Login to read article by mwsw · · Score: 3, Insightful

    The only linked article is behind a login screen, which makes this post pretty useless since I suspect very few of us will bother to register.

    1. Re:Login to read article by Anonymous Coward · · Score: 4, Informative

      Mobile version works for me.

      Hundreds of framed patents hang on two separate walls at the headquarters of Motorola Mobility in Libertyville, Ill. They testify to the pride in innovation at Motorola, a luminary of American business that has survived corporate crises and enormous technological change.But the company has never grappled with something like this: a murky future governed by Google, a powerful master with unclear intentions.In announcing its planned $12.5 billion purchase of Motorola Mobility last week, Google emphasized its interest in the company's rich trove of 17,000 patents. That portfolio would allow Google to defend itself against foes like Apple and Microsoft in the legal arena, where billions of dollars in patent licensing fees can be indirectly negotiated through lawsuits and countersuits.But while industry analysts and insiders say the rationale makes sense, they also say it leaves Motorola in an unusual position. Many acquisitions are aimed at creating some well-articulated synergy between the two companies, but Motorola's future role in this union - beyond patent warehouse - is unclear.Heightening the uncertainty is that the companies involved, both of which declined to comment, are in some ways as different as two technology companies can be. Google makes Internet services and software, thrives on high profit margins and distributes its product using giant data centers. Motorola makes hardware, has modest margins on a good day and moves its products on trucks and airplanes and through brick-and-mortar stores.Some hope the cultures will fuse and lead Motorola to a future as storied as its past. Martin Cooper, 82, who worked at Motorola for 30 years and developed the first hand-held cellphones there, said he hoped great things would come from combining Google's momentum and confidence with Motorola's tradition of excellence in radio technology.

    2. Re:Login to read article by Hatta · · Score: 2

      After all these years the GNAA login still works. L/P: nigger/nigger. Not nice, but easy to remember.

      --
      Give me Classic Slashdot or give me death!
  2. But It Could Be An Amazing Mairrage! by Hardhead_7 · · Score: 3, Interesting

    I have a Droid X, and while I constantly curse at the locked bootloader and lack of customization compared to many other Android devices, I've actually found that it consistently gets better reception than my brother's Galaxy S (both on Verizon) and FAR better battery life.

    AT the end of the day, the fact is Motorola has been doing great things on the hardware side of Android phones. The more I've used other's phones, the more I've come to realize how good my phone is, despite the hatred for Blur that permeates the Android websites. And Blur sucks, don't get me wrong. It's gotten better than it used to be, but it still isn't great. And while you can hide the UI all you want, the underpinnings are always there mucking things up. But Motorola hardware coupled with Google software? Yes, please! This could turn out amazing. With the vertical integration that Apple enjoys, Motorola/Google might be able to build a phone with the same start-to-finish polish as the iPhone, but much more open. I'm excited to see what will happen.

    1. Re:But It Could Be An Amazing Mairrage! by iamhassi · · Score: 2
      It could be, but what gets me is the BS description:

      Heightening the uncertainty is that the companies involved, both of which declined to comment, are in some ways as different as two technology companies can be. Google makes Internet services and software, thrives on high profit margins and distributes its product using giant data centers. Motorola makes hardware, has modest margins on a good day and moves its products on trucks and airplanes and through brick-and-mortar stores. ... "It's like, thanks for everything you did in the 20th century, but you're being bought by a search engine," said Roger Entner

      Welcome to the 21st century, where your hardware is only as good as the software running on it.

      --
      my karma will be here long after I'm gone
    2. Re:But It Could Be An Amazing Mairrage! by Lumpy · · Score: 3, Informative

      Every single Nokia, audiovox, and motorla cellphone that I have owned that had an "external antenna" was a real antenna. Yes I know it was real as I took the things apart after retiring them for parts... Nokia phones are goldmines for Hacker parts.

      Please list what ones had a "fake" antenna.

      --
      Do not look at laser with remaining good eye.
    3. Re:But It Could Be An Amazing Mairrage! by JDG1980 · · Score: 2

      Vertical integration is nothing new, and it isn't just a buzzword. It has a specific meaning. Basically, if a company owns/controls most or all of the parts of its supply chain, it is considered to be vertically integrated.

  3. My guess by Andy+Dodd · · Score: 3, Interesting

    Here's my guess of what happens:
    Google buys Moto Mobility for the patents.
    Google then spins off MM's hardware division, with a full license to the patents obtained, but with Google retaining ownership and control of the patents

    That way Google gets the defensive patent pile without the negatives of competing with their licensees and entering the (less pleasant) hardware business.

    --
    retrorocket.o not found, launch anyway?
    1. Re:My guess by alen · · Score: 4, Informative

      and who will want to buy a cell phone maker with the only future of making me too phones like HTC does

      Moto's problem is that HTC flooded the market with similar phones that have very minor differences. HTC Inspire, desire hd, droid incredible 2, my touch 4g, evo, thunderbolt. they are all either the 82655 or the 86655 qualcomm CPU's which are almost exactly the same with the same GPU's. everything else is minor differences. Moto had too few phones in the market place or made too many models with too many differences

    2. Re:My guess by GIL_Dude · · Score: 2

      Some of us at work the other day were figuring on this exact scenario. Since Moto had recently been threatening other Android phone makers (who were also members of the open handset alliance) with patent lawsuits, Google saw that they could do a couple of things in one stroke:

      - Get a patent war chest to help defend Android
      - Neuter a company that was starting to threaten other Android licensees.

      We'll have to see if we (and you) are right or not over the next 12 - 18 months.

  4. Long term, it is a good thing... by mlts · · Score: 2

    Google pretty much had to buy out MM. That, or when Apple or MS buys them out, face an influx of patent lawsuits over everything Android.

    However, what may be an issue are the two differing philosophies of the two companies:

    Motorola's has been to lock down their devices in hopes of getting modders to go elsewhere. This makes people toss their phones when they can't run the latest apps and buy new ones.

    Google wants to keep devices unlocked so they can push updates and show how consistent Android is.

    Both of these are diametric opposites, because a locked phone that can't be upgraded looks bad for Android to an average consumer.

    Now Google is in a pinch. They now compete against the same companies they are trying to woo to Android, and not go to WP7 or their own OS.

    Google has four choices for the most part:

    1: Sell phones by Motorola and compete against HTC, ZTE, and Samsung who may just get tired of Android and go completely WM like Nokia.

    2: Sell MM, keeping the patents.

    3: Spin MM off as a separate company.

    4: Just shut down MM entirely.

    Of all the choices, the most likely one is #3, as it allows Google to be "neutral" again.

    1. Re:Long term, it is a good thing... by Ngarrang · · Score: 2

      My bet is on option 1, not because of the "getting tired" portion.

      Apple has shown that when you control the hardware AND software, you can do some wonderful things. Google can emulate that success by having a phone that makes the utmost use of the Android, while still providing Android to all of those other handset makers.

      I call it hedging one's bet.

      --
      Bearded Dragon
    2. Re:Long term, it is a good thing... by 0123456 · · Score: 2

      Worked pretty good for the xbox.

      If by 'worked pretty good' you mean 'lost money on every generation while hoping that they'd actually make money on the next one'.

      I'm 99% sure that Microsoft haven't made enough money on either Xbox to pay all the development costs yet?

    3. Re:Long term, it is a good thing... by blizz017 · · Score: 2

      Last thing I read on it was from April in this article: http://www.businessinsider.com/next-xbox-may-be-profitable-on-day-one-2011-4 Seems like the business segment containing Xbox is down 5.5 billion over its lifetime, but has been turning a profit for each of the last 11 quarters.. they may be down overall, but they're going to break even here pretty quickly; even more so if they decide not to go the hardware loss route with the next xbox.

  5. Re:Well... by Anrego · · Score: 5, Insightful

    Both cases kinda piss me off to be honest.

    The whole situation pisses me off. It's nothing specific against google. It's that companies are being bought not for their product, or customer base, or innovations, or capabilities.. but effectively for legal ammo to sue the shit out of other companies/protect themselves from being sued. The actual products (you know, the whole point of all this.. or what used to be the point) can atrophy and die for all anyone cares.. as long as they get their IP!

    I know this isn't news to anyone at this point, but the whole damn system is broken.

  6. Two Reasons by bhunachchicken · · Score: 4, Interesting

    I see two reasons for Google having bought Motorola.

    The first, and the one that everyone is citing most often, is the patent protection that they can now give Android. I must say that I do find it sad that people are so keen to destroy free software. To businesses it is of course a threat, but when you see fanboys and girls jumping and down with glee at the legal actions being brought before the system, I can't help but shake my head. Not everyone wants or can afford to part with huge volumes of cash for an iPhone, a system that is so locked down you might as well be licensing usage of the thing from Apple, rather than own it yourself.

    Second, and the one I've seen less talk of, is the ability for Google to have Motorla build them some flagship phones for Android. As much as I love my HTC Desire, there are several things that annoy the hell out of me

    1. It runs Android 2.2. There is no easy way to upgrade it to 2.3.4 (or whatever comes out next), without either rooting or doing some other hacking. This needs to be fixed, as the average man on the street can't be stuck with a device for 2+ years because the manufacturer hasn't made enough provisions to allow the Android system to be upgraded (allowing for things such as better performance and better battery life).

    2. The dreaded low internal memory issue. Seriously, who thought (and still thinks) that giving the users access to 128MB of internal storage would be enough? Sure, we can shove in an SD card, but if most useful apps refuse to move over, you're basically screwed. I've currently got 11MB free on the internal memory and over 20GB free on my microSD. This is bonkers. Hopefully, a Google phone would have at least 8GB internal and support microSD.

    3. Open is both Android's best asset and it's main problem. Manufacturers and service providers not happy with Vanilla Android? Hack ten tons of irremovable shit onto the phone and tie it closely to the internal system so that it can't be removed. I'm not sure everyone out there wants Twitter and Facebook on their phones. But it's there and using up space that should be free to the user to do with as they please. Oh well.

    So, here's hoping that Google will have Motorola create some flagship phones that address all the above. That would be the next phone I would buy.

    --
    THE HONOUR OF THE KNIGHTS - CC Licensed Sci-Fi Novel
  7. Comment removed by account_deleted · · Score: 2

    Comment removed based on user account deletion

  8. Re:Well... by drb226 · · Score: 2

    the whole damn system is broken

    Welcome to the human race, also known as the rat race.

  9. Value chain play by sgt101 · · Score: 2

    People can't match the iPad for price and performance because Apple are pulling money from the whole value chain - the complete user experience. They are not sharing margin with anyone with iTunes, iOS and the iPad.

    Google wants the same end to end play and has the internet position and software to pull it off ... if it can get the right hardware made. This is all about getting the right hardware made, and getting it made in quickly.

    This is a brilliant acquisition for them

    --
    --------------------------------------------- "In the end, we're all just water and old stars."
  10. Re:Well... by bonch · · Score: 2

    Few people seem to be discussing this, but just this month, Motorola's CEO was publicly threatening to wage patent warfare on other Android vendors. That would have been during the time they were under negotiation with Google, so I believe Motorola strong-armed Google into buying them outright for $12 billion rather than simply entering into a patent license agreement, by threatening to cause an Android civil war.

    Some people were acting like buying Motorola was some great power play, but it was really an act of desperation that cost Google two years' worth of revenue.