It's All About Fertilizing The Android Ecosystem

It was, is and shall remain all about the ecosystem, Google CEO Larry Page indicated in his blog post yesterday announcing an agreement to sell the Motorola Mobility business to Lenovo for $2.91 million. 

“We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users,” he writes, linking to a post about that announcement in August 2011 that promised the company would “create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers everywhere.”

Page’s post repeats “ecosystem” four more times in its 391 words, promising that handing off the handset division will enable Googlers to “devote our energy to driving innovation across the Android ecosystem” in the home market and products such as wearables while Lenovo “has the expertise and track record to scale Motorola into a major player within the Android ecosystem.”



But Google is also retaining “the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem.” Samsung and Google signed a patent peace pact earlier this week, which means that the former is aligning in the battle against the encroachment of Apple’s iOS ecosystem.

“From Apple's point of view, this means Samsung will remain strong but tight with Google, and the aspiration of Lenovo to become like Samsung and to be even stronger in emerging markets starting with its position in China,” Forrester analyst Frank Gillett tells AFP’s Glenn Chapman.

“Lenovo also appears bent on casting actor Ashton Kutcher, who played Steve Jobs on screen, in the role of a company pitchman molded after the public persona of Apple's iconic co-founder,” Chapman reports. “Lenovo is going to try to turn Ashton Kutcher into a Steve Jobs-type guy, and it is going to be fun to watch,” Enderle Group’s Rob Enderle tells Chapman.

Some numbers-crunchers say the value of the patents mitigate some of the shortfall between the $12.5 billion Google paid Motorola and what it’s getting from Lenovo. Not to mention the $2.35 million in cash and stock it took in for the sale of the Motorola Home business to Arris last April.

ZDNet’s Larry Dignan does the math, concluding: “The search giant didn't get hosed and may have even broke even. Google could even generate a small return on the Motorola Mobility purchase, but I'd argue that the opportunity cost and management distraction would have offset any accounting gain.”

Wired’s Marcus Wohlsen observes, “Google still has the intellectual property without the burden of running a separate company.” That will enable it “to fight the patent wars with Apple and Microsoft.”

But Christina Warren has a different take on the “positive spin” in a Mashable op-ed piece. “Motorola is the rare Google failure that reminds us that the company is not all-powerful and that, like any other brand, it too can stumble,” she concludes. “At best, this deal will be remembered as a way for Google to defend Android in the never-ending saga of patent lawsuit theater. At worst, it will be seen as the murder of a once iconic telecommunications brand.”

It will not be all that easy for Lenovo, certainly, as the hed on PC World’s piece indicates: “Lenovo faces chance to become rare PC maker successful in phones.” 

Dell and Hewlett-Packard have both tried and failed, Michael Kan points out, although “HP re-entered the mobile devices market this month, with two voice-enabled tablets for India.” Taiwan’s Acer and Asus, meanwhile, are also developing smartphones but neither has “yet to drum up the same kind of sales Lenovo has for its handset business.”

Lenovo will be retaining the Motorola brand name, as it has done with the IBM ThinkPad. That should be a big help in cracking the North American market.

“In two years, China's three biggest handset makers — Huawei, ZTE Corp and Lenovo — have vaulted into the top ranks of global smartphone charts, helped in part by their huge domestic market and spurring talk of a new force in the smartphone wars,” Reuters’ Nadia Damouni, Nicola Leske and Gerry Shih report. “In the United States, the Chinese companies continue to grapple with low brand awareness, perceptions of inferior quality and even security concerns.”

But who can really predict how this all will shape up? In the third quarter of 2007, RIM’s BlackBerry was the dominant OS in the smartphone market, as Daniel Eran Dilger reported in Roughly Drafted Magazine. Apple’s iOS has just squeezed past Windows Mobile and lesser competitors included Symbian, Linux, and the once-hot Palm OS.

If the CEO of one of the world’s most powerful corporations issued a statement on, say, Nov. 4, 2007, that his motives were to “supercharge the Android ecosystem,” you’d have thought he had gone daft watching sci-fi flicks. Android OS wasn’t officially born until the next day.

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