We’re still reeling a bit from today’s news that Google will buy Motorola for about $12.5 billion in an attempt to protect Android from patent attacks and the chance to offer an end-to-end product but it’s important to know what led up to this. Let’s take a look at Motorola’s recent dealing with Android and how this move may have been predictable if you were watching closely.
Motorola essentially invented the personal cell phone, so it has been a true innovator in the mobile space (and it’s more than 17,000 patents in mobile speak to that) and it had a few of the first ever fashionable phones like the Startac and especially the Razr. The Razr was one of Motorola’s largest hits but it also represented a peak of sorts, as the company remained mired for a long time after that. Many blamed its horrid software – whether through Windows Mobile or its own Linux-based devices – for its lack of a mainstream hit like the Razr.
Things got really bad for Motorola’s mobile division – I’m talking $3 billion in losses for a single quarter bad – and this is where the first talks of spinning it into an independent company popped up. Qualcomm’s Sanjay Jha was brought in to clean up the company’s software strategy and get it ready to be spun off as an independent company. He did this by making many difficult personnel cuts and betting the company’s future on Google’s Android.
You have to remember that at this time, Google’s Android wasn’t the juggernaut it is today, as the Google mobile platform wasn’t sure thing in 2008. Still, Motorola needed to focus its operations around fewer platforms and Android was the only thing that could credibly give the iPhone a challenge at the time.
Jha had been doing a lot to organize the mobile side of Motorola but hadn’t done much that the public could see beyond layoffs. That changed in September of 2009, when he first introduced the Android-powered Cliq for T-Mobile and the love-it-or-hate-it MotoBlur UI and service. The Cliq was interesting but didn’t really blow us away but it was just a sign of things to come.
After weeks of some neat “Droid does” ads, Verizon Wireless released the original Motorola Droid in 2009 and this was its first, true iPhone competitor. With a full QWERTY keyboard, 5-megapixel camera, pure Android 2.0 and an aggressive design, the Droid became a smash hit and it brought Android to the mainstream. Before the Droid, spotting real-life Android users was quite rare but this changed everything.
One could say that the AT&T-only iPhone needed an opponent on Verizon and almost any Android phone heavily pushed by Big Red may have been a success. I think this line of thinking doesn’t give Motorola enough credit for adapting its design and software to create one of the iconic devices of the recent smartphone era. Motorola produced a ton of Android phones over the last three years for multiple carriers but the Droid 2, Droid X, Droid Pro, Cliq 2 and others never quite captured the same appeal of the original Droid.
With Android, Motorola was all about pushing the boundaries and getting advanced hardware on the market. The AT&T Atrix 4G was one of the first phones to land with the dual-core Tegra 2 chipset and it could legitimately be called “the world’s most powerful smartphone” when it was introduced. Motorola was also first to get out an Android 3.0 Honeycomb tablet with the Xoom.
During this whole time, the Motorola split was well underway, as the mobile unit and set-top box divisions would be spun off as a separate independent company. The horrible economy of 2008 led to a delay in it but the deal was finally complete in January of 2011, just a few days before Motorola Mobility had an awesome CES 2011 show where it showed off dual-core smartphones, 4G LTE devices and the Xoom tablet.
The independent Motorola was still trying to gather its momentum as a standalone company and the future looked okay even if it posted a loss last quarter as Xoom sales floundered. It was still able to sell 11 million phones last quarter (4.4 million smartphones) and it was on the path to profitability. At least one prominent investor believes the $12.5 billion deal will be good for Motorola’s stockholders and it could give Google many strategic weapons.
Google has publicly said that Android is under attack by other companies with patent lawsuits and the Motorola deal will give it plenty of ammunition to fire back. Motorola’s been doing wireless for a long, long time, so if an Apple or Microsoft sues an Android maker over patents, chances are Google will be able to hit them back immediately with one of Motorola’s wireless patents. It’s that kind-of-quaint scenario that’s known as “mutually assured destruction.”
The deal could also enable Google to deliver an end-to-end experience with devices that is similar to Apple, which controls the hardware, software and distribution of its iOS devices. I’m not sure I actually like Google focusing on creating its own hardware because this could alienate the likes of HTC and Samsung and I believe that Google’s energies are best focused on software and services. Still, this move has other benefits, as it would make Google the largest set-top box maker out there, which could be quite a boon for the full-of-potential-short-on-results Google TV.
Motorola partnered very closely with Google on many of its products, as it was one of the first to get its hands on Android 2.0 for that Droid. It also worked with the company on being the first tablet to get Android 3.0 Honeycomb on the Motorola Xoom. Google didn’t just show favor to Motorola though, as it also went to HTC to create the Nexus One and Samsung created the Nexus S Google superphone.
Will that change once Motorola becomes Google? Only time will tell but unlike in 2009 when the first Motorola Droid came out, strong Android handset makers like HTC and Samsung have credible platform alternatives now with Windows Phone and webOS