Google could be on the brink of confirming suspicions that it only bought Motorola for its 17,000 patents. The $US12.5 billion acquisition is barely official — Justice Department approval came in February — but Google is reportedly looking to pawn off the hardware division.
From the Wall Street Journal:
There are already reports that Google is sizing up the cable set-top box business for sale. From Asia, rumours have swirled around the handset business, suggesting that Google has already offered it to China’s Huawei at a high price.
The industry has been rife with speculation as to Google’s plans for its new purchase. It puts Google in an interesting spot, as its position in the Android ecosystem has been as operating system provider to 55 handset makers. But would it actually delve into smartphone and tablet manufacturing and risk shooing away its deep bench of OEMs?
Google itself might not even have a clear answer. Mobile chief Andy Rubin seems hell bent on communicating that there will be a “firewall” built between Motorola and Google. That said, there is also a belief that mighty Google arrogantly thinks that it juggle several roles, and still maintain its solid position in the mobile industry. But that might be wishful thinking.
The disquieting answer is that there appears to be no sense that a choice is even required. There’s only a cocky belief that Google really can be all things at once: a hardware company with software margins, and a neutral Android arms dealer that just happens to be building its own Motorola army on the side.
It would be in Google’s best interest to stick with what it’s been doing well: maintaining a popular mobile platform (and also focusing on that whole search thing). In fact, Google is already walking a thin line by playing most-favoured nation with its Nexus phones, and any hint of a Moto bias could push manufacturers to more seriously consider Windows Phone as an alternative. The good news is, Google has reportedly tapped Asus for its Nexus tablet, a very strong indication that it doesn’t intend to use Motorola for its hardware.
Financially, Motorola makes more sense for its intellectual property. As a device maker, it hasn’t been profitable for a while, either. Its market share is about a measly 4 per cent, and its posted losses for five consecutive years, totalling a negative $US5.3 billion, according to the WSJ. The value truly lies in its vast patent library, something that Google, perhaps, recognises. [WSJ]