Google deal: is Motorola actually gaining?
Motorola Mobility is in an unusual position.india Updated: Aug 22, 2011 22:57 IST
Motorola Mobility is in an unusual position.
Acquisitions are aimed at creating some well-articulated synergy between two firms, but Motorola’s future role in its $12.5-billion deal with Google is unclear.
Motorola’s rich trove of 17,000 patents will allow Google to defend itself against foes like Apple and Microsoft in legal arena. But, Motorola’s position is different.
In fact, the two companies are starkly different. Google makes Internet services and software, thrives on high profit margins and distributes its product using giant data centres. Motorola makes hardware, has modest margins and moves its products on trucks and airplanes.
Some hope the cultures will fuse and lead Motorola to a future as storied as its past. Martin Cooper, 82, who worked at Motorola for 30 years and developed the first hand-held cellphones there, said he hoped great things would come from combining Google’s momentum and confidence with Motorola’s tradition of excellence in radio technology.
“The combination might make Motorola successful — again,” said Cooper, whose patent from the early 1970s for cellular phone technology is among those that hang at the company’s entrance.
Motorola would become a laboratory for Google to seek to perfect Android in concert with newly acquired hardware engineers, industry analysts said.
But if it appears to be getting too cozy with Motorola, Google risks upsetting other mobile phone makers like HTC and Samsung, who run some of their smartphones and tablets on Android.
“How do you compete with your partners and also work with them?” said Ben Schachter, an analyst with Macquarie Capital.