Google’s takeover of Motorola Mobility
The battle in the mobile industry takes an unexpected turn
Aug 20th 2011 | from the print edition
WHEN smartphones were still young and computing tablets not yet born, some analysts predicted that the market for mobile devices would sooner or later look much like that for personal computers (PCs): there would be a clear division of labour and intellectual property between makers of hardware and software; a dominant operating system would emerge; and Apple would again become a niche player.
If proof is still needed, Google’s takeover of Motorola Mobility is the strongest sign yet that this will not come to pass, at least in the near future. On the contrary, the mobile-device industry will bear a closer resemblance to its other parent: the market for old-fashioned, voice-only handsets.
Start with intellectual property. In contrast with PC makers, firms in the telecoms industry have long fought over patents. If such disputes are even more common over today’s mobile devices (see article), it is because they are exceedingly complex and based on intellectual property from many different industries.
Gaining control of Motorola’s big patent portfolio will provide Google with ammunition in the ongoing battle between mobile platforms. Android, Google’s operating system for smartphones and other devices, has taken the world by storm. Its global market share is approaching 50% (see chart). Yet Apple and Microsoft have found a way to slow down, and even benefit from Android’s advance: going after makers of smartphones running Android for patent infringements.
This tactic has put a price on Android, which Google gives away free. In early 2010 HTC, a leading vendor of Android devices, agreed to pay royalties to Microsoft for the use of its patents. And in July Apple won a legal victory against HTC which could lead to even higher payments.
Google’s acquisition also illustrates the second difference between the markets for PCs and mobile devices: the latter will be more vertically integrated. Apple’s big advantage is controlling all parts of its products, from the user interface to the processor. It is thus able to fine-tune them, for instance to keep power consumption low or make touch screens react faster. Most devices powered by Android are not as highly optimised—which helps to explain why Android tablets, for instance, have yet to catch up with Apple’s iPad.
Owning a handset-maker allows Google to better integrate software and hardware. At the same time, the firm cannot copy Apple’s model completely. If it is seen to favour Motorola’s products, other device makers might abandon Android. This would defeat the operating system’s purpose: making sure that Google’s services—and thus its lucrative advertisements—make it onto as many mobile displays as possible. When Google’s bosses announced the merger, they took great care to explain that they would run Motorola as a separate business and not change the way in which Android was managed.
Carolina Milanesi of Gartner, a market-research firm, expects Google to use Motorola to build benchmark models for Android devices to help others improve their products. The industry is moving towards a similar set-up. As part of a co-operation agreement with Nokia, Microsoft is using the Finnish company as its hardware-maker of reference.
市场研究公司Gartner的卡罗琳娜 米拉内西Carolina Milanesi估计，Google会用摩托罗拉打造一个安卓设备的标准模板，以帮助其他制造商改进各自的产品。移动行业正逐步走向标准化，微软已与诺基亚达成合作协议，所有硬件制造商的产品都以这家芬兰公司的硬件为准。
Third, it is unlikely that one firm will ever dominate the mobile industry as much as Microsoft did in PCs—because the most powerful companies will do almost anything to keep this from happening, says Ben Wood of CCS Insight, another research firm. Just like Google, they will spend billions to stay in the race. And wireless operators have let it be known that they are already unhappy with the current duopoly of Android and Apple. They will certainly push Nokia’s new Windows phones once they hit the market later this year or early next.
第三个不同，用另一家市场研究公司CCS Insight本 伍德Ben Wood的话来说，就是在移动行业中，不大可能有公司像微软在PC市场那样长期独家垄断，因为各大公司会竭力阻止发生这种情况。比如Google就将花费数十亿美元来保持竞争力。而无线运营商已经公开表示，他们对目前安卓和苹果两家争霸的局面感到不满，一旦诺基亚的Windows phones手机在今年或明年年初上市，他们肯定会助其一臂之力。
All of which means Google’s acquisition is unlikely to be the last deal of its kind. Other American technology giants have plenty of cash—and a need to strengthen their mobile stature, says Mr Wood. Even Amazon, an online shopping giant, may feel the urge to splash out and buy, perhaps, Sony-Ericsson, which like Motorola seems too small to make it on its own. The battle for supremacy in the mobile industry has only just begun.