Multiple reports this week have said that Google will get regulatory approval on its intended acquisition of Motorola Mobility as soon as next week. If this happens as expected, the acquisition should close shortly thereafter.
This isn’t much of a surprise. When the deal was unveiled in mid August, 2011, Google had offered $40 per share. Motorola shares immediately spiked to over $38, reflecting small risk of the deal falling through.
In other words, nobody really believed Google would have trouble gaining regulatory approval. And why shouldn’t they get it? If Apple can own an entire platform and gain so much market share in the smartphone world, why shouldn’t Google be able to make its own hardware and aim to control the entire platform from software, to network infrastructure, to hardware?
Google says it wants Motorola’s patents, but also talks up the company’s hardware design capabilities. But I still think Google wants to own the entire platform so that it can solve the fragmentation problem before it gets out of control.
There really aren’t any mobile OS vendors who don’t have significant stakes in hardware companies. RIM and Apple are the obvious examples, but so is Microsoft, with its quarterly $250 million dollar “platform support payments” to Nokia.
Android isn’t really open. That’s not a knock. It’s just the truth. The whole “open” argument does seem kinda brilliant though. Look how many vendors adopted it. Look how much market share Google now has in the mobile OS market.
Do they really care about the long term success of the vendors? Maybe, but maybe not. Google cares about people using Google services and showing Google ads. They only need to support vendors until critical mass is achieved. As soon as the OS has critical mass among hardware vendors, app developers and consumers (check, check, and check) it has won. Google can then move onto fix problems such as fragmentation and integration into the larger consumer product ecosystem (home entertainment, etc).
The battle is changing, and Google is adapting along with the market.
We’ve already seen that 8.5 percent of Internet use comes from mobile devices. That number is nearly double its year-ago level. Where do you think it will be in 2, 3 or 5 years? Probably a lot higher. Google is an advertising company. It’s critical that they position themselves such that user eyeballs are on services or content that Google controls. In my opinion, buying Motorola was a risk worth taking to protect Android’s growth and sustainability.
Chris Umiastowski is a former sell-side equity analyst at Orion Securities and TD Securities. Before that, he was an engineer for Nortel Networks. Chris is co-host of the Mobile Nations Stock Talk podcast.
We may earn a commission for purchases using our links. Learn more.
The EU will follow the UK's example in not banning Huawei
The EU will not block Huawei equipment from member states' 5G networks. Instead, it has opted for a limited approach aimed at threat mitigation, urging member states to not rely on high-risk suppliers.
Are Android phones 'safe' from viruses & for banking?
No online device is really safe, but your Android phone gets pretty darn close.
Is it better to buy new or used smartphones?
When buying a phone, there's a big decision you need to make — whether to get a new phone or something that's used. Our AC forum members recently shared their thoughts on this topic, and this is what they had to say.
The best portable instant photo printers for Android devices
You're on the move and making memories on your mobile, but why not try and make those memories a little more permanent?