Options Available With Google for Motorola Business
May 23, 2012: Google has bought hardware business, courtesy of Motorola and stockpile of legal patents of Motorola Mobility for $12.5 billion. After acquiring the legal patents, historic technology brand and a multibillion dollar handset as well as TV set-top box business, it is clear that Google will be able to legally defend as well as offend for patents of Motorola. Moreover, the Google will also get the tax benefit in the coming term as Motorola has been incurring losses in the past few years. However, Google has not made it clear as to how will it proceed with the actual Motorola business.
Well, some of the available options that Google can go with for business of Motorola as per industry analysts are:
Keep Motorola as an independent entity:
Google can operate Motorola as an independent business for now. Thus, by running the company at a slight distance can be one of the best ways that Google can opt for. The Google CEO Larry Page can appoint Dennis Woodside (a long-time Googler) as Motorola’s new Chief Executive along with some other executives as well as marketing lead Gary Briggs to manage the business of Motorola. This new team will be able to keep the brand alive.
However, the analysts consider that the plan to run Motorola as an independent company isn’t a smart option to select. The analysts say that the company has been incurring losses for the last few years and it has posted a wider quarter loss last year as an independent company. Despite a successful flagship phone at Verizon Wireless along with Droid Razr, the company has witnessed decline in value. Therefore, running the company as an independent entity may not do much and the profit margin may not satisfy the Google’s expectations.
Use Motorola as an Android Experience Device:
Google could make use of Motorola handsets to ensure that the company supple adequate stock of Android experience devices in the mobile technology market. “(Motorola) gives them the vehicle to deliver the Android experience that they see fit,” said Gartenberg, an analyst at Gartner. He also added that Motorola could be used as a showcase for stock Android software by Google without any attempts to dominate the mobility market.
But, this again would be a tough task for Google to do as the other handset vendors will mostly inspect how these products make way to the market. And as Android is made available to all, Google is looking forward to grant early access of its platform to multiple vendor partners’ latest releases for creating multiple Nexus device at a time. Thus, using Motorola as a showcase for Android software wouldn’t be feasible for Google.
Google can opt for vertical integration method:
The company can go Apple’s way by creating a complete end-to-end product with the Google hardware and software. It can build its own flagship Android phone working directly with Motorola. In this way, Google will have complete control over line of Android phones produced by it. In short, it will be having in-house expertise of designing and manufacturing phones with Motorola.
It is to be noted that this would put Google directly in competition with the other phone that boasts software advantages over its line of products. “If they become a competitor, the other guys will walk,” said Matthew Thornton (an analyst at Avian Securities). He added saying, “They will flee very quickly.” Thus, this could really be one of the appropriate options for Google to run business of Motorola.
A similar method can also be opted for set-top business of Motorola, which has been consistently performing well. The Motorola set-top box interface makes it convenient and better to search TV programs without actually searching for a long time. So, we may see integration of Google TV with the Motorola set-top box in future. However, it will have its own issue like – whether the unit should have Google capabilities or Motorola’s set-top box interface only. Thus, this can really be a bit difficult to select as the interface by Motorola is really appreciable.
Google can sell Motorola business:
Google can thing of selling the business of Motorola and keeping the patents. The possibility of something like this happening is 50%. Many of the analysts believe that the Google may sell the business to some other company and still hold the patents. Moreover, it is considered as one of the best options available with Google for business of Motorola. The company can do the same with the set-top box as well.
A group of analysts with the strong belief of Google selling the business think that the Google wouldn’t like to run hardware business. “Ultimately, I don’t think Google wants to go the hardware route,” Thornton said.
What exactly has to be done with Motorola business is solely the decision of Google, but Google’s unclear approach over the business has compelled many business analysts to estimate the nearest options that could be better for Google to opt. Also, the concerns raised by the analysts are mainly because a single move by Google could certainly leave an impact over the technology industry as a whole.