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Google's Acquisition of Motorola Mobility: Taking a Giant Bite out of Apple?

By Product Management | May 23, 2012

CATEGORIES: Mobile Quality

Today, Google announced the completion of its deal to buy Motorola Mobility at $40 per share, or $12.5 billion dollars – a 60 percent premium from Friday’s stock price – to enter the hardware market. The official commentary from Google states that one of the main reasons for the acquisition is “given Android’s phenomenal success, [Google] is always looking for new ways to supercharge the Android ecosystem… for the benefit of consumers, partners and developers everywhere.” For a 60 percent premium, I have a feeling the acquisition has more to do with Motorola Mobility’s 17,000 patents than for their hardware. Royalties, anyone?

If you can recall, Motorola Mobility acquired Three Laws Mobility, Inc. (3LM) in January, a company which prides itself in making Android “enterprise-friendly.” The Motorola press release states that the goal of this particular acquisiion is to “make Android devices more manageable within corporate environments.”

So, what does this mean for enterprise organizations? Motorola Mobility has a strong enterprise legacy. The company has a lot of corporate IT intellectual property that can used to bolster Android devices in the enterprise, helping Google saturate the corporate environment. The joining of both companies will most likely boost Google’s Android-based smartphone business and XOOM tablet business.

How about the developer community? This is hard to say. This acquisition can affect developers in one of two ways. It can either offer development of apps with more variety in device capabilities and integration of all of Google’s services OR it can mean (even more) fragmentation in the Android ecosystem. Ultimately, the open source developer community will be the driving force in either direction.

What about the impact on the pervasive Apple world? According to a new study by Zscaler TreatlabZ, the first quarter of 2012 has seen a dramatic shift of consumerization trends in the enterprise sector. Mobile devices running Apple’s iOS proliferated over Google’s Android. The number of apps developed for iDevices and the numbers of iDevices in corporate organizations are continuing to grow – but with the joining of Google and Motorola Mobility, will the latter “supercharged” entity catch up in a blink of an eye? Apple doesn’t disclosed figures of device activations but with about 850,000 Android devices being activated each day, this may be the case.

Apple is known for controlling the end-to-end mobile experience from the software and hardware to the services that can be used. And Apple leverages their iDevices to drive sales of its iTunes music and App Store products. Maybe this acquisition is so that Google has the option to integrate its software and services more tightly with Motorola hardware, producing a multitude of Google-centric phones like the Nexus One (from HTC) and the Nexus S (from Samsung). Perhaps Google is on its way to becoming an Apple (competitive) counterpart – making available pure Motorola devices with an Android feel (similar to all of Apple’s devices with the iOS feel).

With the acquisition, Sanjay Jha stepped down as CEO of Motorola Mobility and was replaced by Google exec, Dennis Woodside. Last week, Sanjay said at the Oppenheimer & Technology Conference that “…in the long term…you will see meaningful difference in positions of many different Android players.” A week later, the acquisition was final.

Only with time (and in the long term) will we will know what the impact of this acquisition is to enterprise organizations and the developer community. But according to Sanjay, “long term” isn’t really that long.

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