Defragmentation
In the conference call yesterday Google was keen to stress how much growth potential it sees in Moto as a stand-alone business. This may be the case, but there are plenty of other profitable companies Google could have bought if it was in the conglomerate-building game, many of which would have been easier to incorporate.
Then again, given the hassle Google has had from anti-trust authorities with its last couple of major acquisitions, it may no longer be possible for Google to purchase online search and advertising companies anymore.
But the real reason, apart from patents, Google gave for the acquisition was to help it to improve the Android platform. This mainly entails dealing with its fragmentation problem. Offering a nominally free, open platform has enabled Android to grow incredibly quickly, but the situation with hardware specs and versions of Android is now such a mess that it's actively putting off some users and developers.
Now that Google owns an OEM, it can not only learn more about their needs and incorporate that into its Android strategy, it can also seed the market with new versions of Android via a hardware platform it has complete control over. A sort of Nexus programme on steroids.
There's one big problem with this laudable theory however: the other Android OEMs. It was said on the call that the lead-partner programme will remain competitive, but if part of the point of owning Moto is for Google to be able to have a hardware platform it controls, doesn't it defeat the object to then let a third-party release a new version into the wild?
On the flip-side, if Google continually favours Moto with early access to code and other goodies, that will put it at a massive competitive advantage over Samsung, HTC, etc, and presumably drive them away. It's hard to see how Google can have the best of both worlds here, but I still believe it will try, and the fact that Microsoft so clearly favours Nokia on WP7 will probably help them to stay loyal, for now, despite Microsoft's attempts to lure them away.
I believe the king-makers in the mobile platform war are developers. Without third-party developer support for the platform, mobile devices can't offer the range of attractive and useful apps end-users now demand from them. So to get a sense of the broader implication of this deal I spoke to Mark Mason, founder of app developer Mubaloo, to get his take.
"I think it will improve things as long as it helps sort out the fragmentation of Android, especially regarding the different versions and hardware specs," said Mason. "It also puts Google closer to the operators, which is a real advantage, especially when it comes to the access of data.
"Google has instantly turned itself into an Apple in the US, where it has 30 percent Android market share. Android OEMs have not been quick enough with Android, so Google wants to help out. I honestly think Google doesn't know everything about what this deal will do for them and they're probably running a bit scared of Apple too."
I suggested that if Google does too much to standardise Android handset specs that may result in the homogenization of the ecosystem and make it even harder for OEMs to differentiate their products. Mason agreed and said Google needs to look for the ideal balance.
To conclude I asked Mason which platforms his company is currently developing apps for. He revealed that their workload is around two fifths iOS, two fifths Android, and a fifth web apps. There's a bit of WP7 work, which he expects to grow once Nokia gets going, and HP has shown some interest in getting apps done for webOS.
I asked why BlackBerry isn't even on the list. "We feel very few people download apps for BlackBerry, and it's also not an easy platform to develop for," said Mason. "I really think BlackBerry has missed the boat and it will die a death."
He wasn't much more optimistic about webOS, and we agreed that the mainstream market can probably only support three platforms. This means that Android OEMs are left with very few alternatives - unless they want to get together and give MeeGo a spot of CPR - which ensures that they will have to tolerate Google's ownership of one of their competitors for the foreseeable future.
The general consensus seems to be that this deal changes everything, but nobody - even Google - knows what the precise implications of this deal will be, assuming regulators let it happen. The market seems to be consolidating around three platforms owned by three of the biggest tech players. This is probably a good thing for both competition and stability, but I'd be surprised if this was the last big acquisition in the mobile device space.
