discussed why Google's ownership of Motorola is unlikely to bring major changes to the balance of power among Android licensees. But Motorola also has significant interests in the set-top market. And, of course, there's the question of Android's main licensed rival, Windows Phone 7. In both of those cases, though, there is also unlikely to be noteworthy change, reinforcing the acquisition as a purely defensive move. Read on for more.
Googorola and the cable companies. Motorola has long been a brand synonymous with wireless. Despite its post-spinout superficial misnomer of "Motorola Mobility," though, it is also the leading vendor of set-top boxes to American cable companies, a business that was also entered via an acquisition (of General Instrument in 1999). For a taste as to how nominally a set-top company changes when a booster of open Internet standards buys it, we can turn back to the clock to Cisco picking up Motorola set-top rival Scientific Atlanta in 2005. Have you seen an innovative transformation of your cable set-top experience since then?
Google may have much broader consumer ambitions than Cisco, but the cable companies still call the shots with their equipment vendors. Not only have they resisted Google TV, but they remain opposed to an AllVid gateway proposal supported by Google, Sony, TiVo and others that would open access to their breadth of video from a wide array of devices within the home. Google ownership may lead to further discussions with cable operators about Android set-tops or Google TV, but don't expect a Verizon-like Android embrace as long as cable companies don't have to compete against "iCable."
Googorola and Windows Phone 7. Faced with the prospect of competing with their operating system's lead benefactor, some have proposed that Google's takeover of Motorola will lead to an exodus to Windows Phone 7 by Android licensees. One wonders, though, what this would look like since HTC, LG and Samsung are already Windows Phone licensees. These handset companies could "emphasize" their Microsoft-flavored devices more, but to do that they would probably like to see greater ability to customize via Microsoft fiat and wider component support, the latter of which is being aided by Nokia's porting work. Speaking of Nokia, it sees Google's acquisition of Motorola as great validation of its Windows Phone allegiance. But Nokia's pleasure with its position is practically irrelevant to its fellow Windows Phone licensees. In contrast to other Android licensees faced with the potential of competing with preferential Motorola treatment (treatment Google denies will occur), Windows Phone licensees are competing with preferential Nokia treatment since only Nokia has the freedom to customize Windows Phone 7 as it sees fit.
In contrast, HTC, Samsung and LG still have more room to maneuver around a preferred licensee with Android than with Windows Phone 7. In fact, they may have more real-world flexibility than even Nokia, which has promised restraint in order to preserve consistency across Windows Phones. That consistency is something that there's less expectation of in the Android world.
Perhaps Google wanted to acquire Motorola's patents so quickly that there was no time to look for a buyer of the company's hardware business. Perhaps it would have been hard-pressed to find a buyer -- at least one that would keep Motorola's handsets excursively using Android -- even with more time. And perhaps it still will sell some or all of that business at some point. Certainly, keeping Motorola as an independent entity facilitates such a transaction down the road. Undoing Google's entry into devices would remove the shadow of conflict that is now cast over its relationship with other Android licensees for benefits that are patently unclear.
Ross Rubin (@rossrubin) is executive director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own.