Bats And Robots Living Together: Google Buys Moto Handset Biz

Ever since we saw the split of Motorola Mobility from the other (and pre-Droid, more reputable) areas of Motorola’s business the question has been who would buy this business in the end. Google, I don’t think, was ever a likely contender until recently, though its move today not only makes sense but has the potential to change the playing field in mobility.

Motorola made a critical decision leading up to October 17, 2009, the launch of perhaps its most anticipated handset since the original Razr, a decision to use what was at that time a relatively new and still buggy OS called Android. This bold move came as the result of six years of product launches that promised and didn’t deliver, open letters from executives urging a split and key personnel departures. Moto had to do something big and the bet paid off.

Since that time, however, we’ve been seeing increasing fragmentation of the idea of “Android.” In addition to the growing number of releases – each with an increasingly hard-to-remember name of a sweet – we’ve seen “advances,” overlays to the experience such as HTC’s Sense UI and Moto Blur. These well-intentioned ways of differentiating a given handset vendor’s product resulted in confusing the consumer around what Android “looks like” and how it works. This is a dangerous gambit in the face of a major competitor known for tightly controlling look, feel and function across all of its devices.

So what does today’s news mean? A few things:

• We’ll see the Google-branded “flagship” devices from Google start to gain consistency.  Having one hardware design methodology allows buyers to build a critical mass of excitement behind one offering in the Android space. Having dedicated engineering inside of Google for Android Flagship devices, we’ll see the “overlay” embellishments such as Moto Sense give way to purpose-designed hardware features that make Google’s handsets the handsets to have. Sound familiar?

• A side-benefit of the internalized device design process will be that both consumers and businesses seeking a handset will be able to compare Android devices on features. To date we’ve seen Android handsets marketed like laptops with boasts of “dual core,” “super AMOLED” and other technical terms that don’t help enterprise buyers equip their mobile users for a task and don’t help consumers answer a critical question of “is this device better than x.” In most cases, “x” relates to an iPhone – sold almost exclusively on use-case versus features.

• A services ecosystem will emerge. Use -cases are powerful things in mobile, but only when backed with an array of tools that are designed to compliment, and work well on, the devices users will interact with them on. Apple has done a masterful job of this (save for a painful app migration of some notable-names like Facebook to the tablet) and the fragmentation in Android has hindered this to date. A lack of consistency in screen size, processing power and i/o capabilities makes it very difficult to ensure a parity of experience across the platform. That fragmentation will still exist though Google will now have a fleet of devices – Moto devices or whatever they’ll come to be known – will provide an alternative that “just works.” This is critical for adoption, especially in enterprise. I met with an enterprise app vendor that was only developing device-native tools in iOS and serving everything else with web-based apps due to the extreme fragmentation, that sort of attitude from the developer side makes Android a second-class citizen, I expect this move reverses that trend.

Are there downsides? Sure; some of the same companies whose logos graced the backs of recent Google flagship devices are OEM’s of critical components for mobile devices such as LED screens, touch panels and other mobile innards. This move by Google puts them squarely in competition with channel partners who may suddenly be less-than-happy to fulfill orders for Google devices as the hardware innovation machine gets cranking. The result could be even more acquisitions in Google’s future – though I don’t think they’ll buy their supply chain outright. I wouldn’t, however, put it past Google to corner the market on tech that makes it’s handsets unique. Think of recent “gee whiz” product embellishments such as NFC as one example.

Who does this put the pressure on? Microsoft, HP and Nokia for sure. Inside the US market, The former and the latter have the potential to capitalize on what is already a relatively consistent experience in Windows Phone 7. In some ways, though late to market, the newest version of Windows on mobile leapfrogged the growing pains displayed by Android in having a consistent device experience. In Nokia I see a mix of device announcements with some (especially outside the North American market) still sporting a legacy OS (though this is a substantial part of Nokia’s business and will continue to be) which lead me to posit that the software-hardware marriage we see before us won’t be an instant success rather an evolution over time. It’s too soon to pick a winner. As far as HP goes, while its WebOS has received a number of positive scores on usability, the best platform does not always win – we need only to look back to the initial version of the iPhone and the detractors that dismissed it initially being all sizzle and no steak, at least for enterprise manageability and security concerns. Getting the word out about WebOS and pairing it with use-case specific hardware (targeted even to a certain vertical) is critical for HP to find a foothold in light of this market contraction.

Someone asked me today why I thought that today’s announcement that Google would acquire the handset business of Motorola was surprising given that Moto is an Android handset vendor. A fair question, but this story is older than Android and has taken a long time to occur, serving as a reminder that we’re still in the early days of mobile where what was unthinkable 3 years ago is logical now. There’s much, much more to come.

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