Google’s balance of power or tipping it against itself?

Google buys Motorola Mobility Inc.

Google acquires Motorola  – A big news by any standards and welcomed amongst mixed responses from other licensee Android handset makers like Samsung, LG and HTC. This is a move that has given us much to study about and bring under the scanner Google’s current move as well as future moves and how it spells good or bad news for these manufacturers.

• If everything goes well, Google will be able to successfully thwart off any further attacks over the Android ecosystem (yes, it is an ecosystem now as someone depends on the other) by big players like Apple and Microsoft who have been gnawing their way in to slap patent –infringements and squeeze out royalties alike to hamper Android’s progress.
• However, if chaos prevails, Google’s Android ecosystem can come crashing down because of simultaneous pullout by other licensees and Google would remain the only one supporting the Android platform through its newly acquired unit – Motorola Mobility Inc.
• Google can also be tagged as self-dependent now, i.e., if the other licensees try and dump Android over other platforms like Windows Phone 7 or maybe in-house platforms like Samsung’s BADA, Google will always have a production unit of phones ready with Android operating system. Thanks to its latest buy – Motorola.

Lots of patents are owned by companies and this builds up a patent portfolio. Sometimes, two companies agree upon utilizing each other’s technology by entering into an agreement, a process called “Cross Licensing”. This turns out to be the peaceful way of resolving a patent infringement. However, the aggressive approach involves filing a lawsuit and claiming damages due to stolen technology resulting in patent infringements.

Apple vs. HTC

Apple sued HTC over 4 patent-infringements counts and eventually drew first blood in the legal battle. HTC is an Android licensee and the technology it uses for its Android-based handsets were the same used by other similar licensees like Samsung and LG. The court favouring Apple indicated that it was bad news for them and Apple could take them down too over the same charges.
Apple and Microsoft have already been pounding these manufacturers over patent-infringements. HTC, supposedly, is already paying a $5 per handset royalty to Microsoft over similar claims.

Goo-Torola:

1. Google definitely had to act fast to ensure its defence system is in place to counter the slow march of Apple and Microsoft towards pulverizing Android’s further progress. With the ITC (International Trade Corporation) ruling the case against HTC, it was only a matter of time before Apple could sue Samsung or LG or Sony Ericsson or any other licensee over the same counts of patent infringement. The major pressure being that ITC has the power to ban handsets from a particular country if found guilty.
   
   
2. It seemed likely that under pressure, the other Android-based handset manufacturers could’ve bailed out simultaneously to avoid confrontation with Apple. This move could’ve curbed interest in Android Applications by the developers and left Google defending on its own.
3. Motorola was a licensee which was still untouched by Apple and had 17,000 patents under its banner and a further 7,500 for which it has applied. It is even involved in production of set-top boxes for televisions. Even though doling out impressive hardware, the sales figures for the mobility unit were still dipping with each passing day.
4. Google so far had a weak patent portfolio and with the addition of Motorola’s patents, it was bound to become strong enough to hamper Apple’s advance and force cross-licensing rather than legal proceedings.
5. On 16 August 2011, the results were for everyone to see. Not only is this acquisition a defence mechanism for Android and its ecosystem, it can also launch Google as a stand-alone handset manufacturer and even spread as far as to promote Google TV, a project involving Android and its Chrome browser and other applications in televisions.
6. Motorola also had copy-cat accusations from Microsoft and with Google being by its side; Microsoft will have to think twice before proceeding legally as dragging Google to the court can create problems and same goes for Apple.

Key concerns for partners:

1. The concern for the 30+ Android handset licensees is that Google will prefer its own unit over other handsets and by running Android in their own phones, they will help promote a rival handset maker. Their concerns highlight that Google will optimize Android for best performances in its Motorola based handsets, updates might reach earlier than the others and customized handsets that can hamper the sales.
2. Android is a free open source platform and every licensee had the option to take the code, apply it to their own handset, optimize it and let it run wild. This way, smaller handset manufacturers were able to compete against the best of the world, like Apple and Nokia, by providing equal finesse when it came to quality and quantity. With Google’s latest move, the time of equal footing has been disrupted and it has turned from being a partner to being a competitor.
3. Google’s Assurance as of now is that there will be no preferential treatment for Motorola and it will function as a separate unit. These views support Google’s claim that the whole move was to protect the Android ecosystem rather than threatening it. Some of the people from Samsung and HTC also welcomed the move so far.
4. Microsoft has already started convincing Android partners that Google will be treating them as “second-class citizens”. This was also followed by a statement to promote their Windows Phone 7 platform claiming “investing in a broad and truly open mobile ecosystem is important for the industry and consumers alike, and Windows Phone is now the only platform that does so with equal opportunity for all partners.”

The Gainers:

1. Nokia : Motorola’s acquisition has fueled rumours that Nokia will be ready to be taken over by Microsoft, news that has resulted in its shares rising by more than 17% in the US.
2. Research in Motion (RIM) : RIM shares rose by more than 10% as a result of a possible bail-out by Android licensees and Blackberry’s taking a preference over them.
3. Apple Inc. : Apple remained unfazed by the whole new development and could witness a better sales figure if Android is abandoned by the partners.
4. Microsoft : Microsoft has opened its arms to the Android partners to choose its own OS as a platform of the future. It is quite possible that many would see it as a safe option.

In the end, it would be sad to see if the handsets like Samsung and HTC start their distribution sans Android. Over the past few years, it has not only been the success of Android that has catapulted their phones into the market to gain a superior spot. It has also been the result of superb hardware and quality that has left its mark. Buyers now get an optimum hardware-software combination at affordable prices and this ensures accessibility and equality to all. Samsung and HTC are much loved worldwide; especially the Asian markets and their resignation from the Android ecosystem would be seen as unpleasant by many. HTC has already decided to fend off Apple’s advances indicating positive signs.

Google’s move is not a move to threaten its partners. Rather it is for everyone to stand up and stop the patent-infringement lawsuits, promote cross-licensing rather than looking forward to impose a ban on smaller players. Android is loved because it is open-source and is free for all. It promotes the essential message – Knowledge is for free.