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Google’s $12.5 billion purchase of Motorola Mobility today shows that the company is all-in with Android, paying a 63-percent premium to acquire Motorola. Google says it will run Motorola(s mmi) as a separate business and the company will remain a licensee of Android(s goog). The deal should end speculation that Motorola will revert back to Microsoft’s Windows Phone 7 (s msft) platform, while at the same time, raising questions from other companies that build Android devices.
In 2007, Google helped form the Open Handset Alliance (OHA), to help promote and advance the Android platform. Many of the top-selling Android handsets come from OHA members such as HTC, LG, Samsung, Sony Ericsson(sne) (s eric), Acer, Asus and of course, Motorola. Here’s the official commentary from Google on Motorola’s future, which members of the OHA are surely interested in:
Motorola’s total commitment to Android in mobile devices is one of many reasons that there is a natural fit between our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers everywhere. This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.
The statement is exactly what Google has to say in this situation, but I’m not sure all the other OHA members and Google partners will buy it. Whether or not Google will maintain Motorola as a separate business, member companies will always wonder if Google has provided any Android code or plans with its new hardware-building subsidiary in advance. Google has already given cause for concern by not releasing the Honeycomb source code to the open-source community back in March, which set an ugly precedent in terms of trust and code sharing.
No matter how Google spins this scenario, it really flies in the face of the Open Handset Alliance, currently composed of 84 technology companies. The OHA implies that partners will work together to create a better mobile experience, even though they actually do compete every day. And at the center of the OHA is Google itself, which, no matter how it tries to refute it, has entered the mobile phone hardware business. Until now, no OHA partner has competed with Google in terms of hardware.
That means there’s constant potential for an Android partner to question if Motorola is getting some type of special treatment such as a heads-up on Android changes it could adjust for prior to other Android hardware markets, for instance. Simply put, this is a door that once opened is very hard, if not impossible, to close. The situation is akin to Microsoft buying Dell (s dell): Would HP (s hpq) and others be happy about that?
Clearly, a key reason for Google’s purchase of Motorola is the acquisition of the handset-maker’s many patents. Samsung, a key Android partner, is currently facing legal action from Apple(s aapl) due to product and software similarities with Samsung’s Galaxy S smartphones and Galaxy Tab slate. Motorola’s Xoom tablet is also a possible target for patent violation. So with the purchase of Motorola, Google may have a better chance to help defend Android patent suits.
But the cost for such help could be too high, and I don’t mean the $12.5 billion. If Android hardware partners perceive that they can’t trust Google after this deal, the cost could be that such partners shift resources away from Android in part; perhaps to Microsoft’s Windows Phone 7 platform, which is looking better with the upcoming Mango software update. With the Motorola purchase, Google has started down a slippery slope that could be more difficult to manage than the patent problem itself.
Thumbnail image courtesy of AndroidSpin