I've been too busy to be read very much and therefore haven't found any good commentary on the Google buy of Motorola, which I've been thinking of this week. Here is my overview of the deal from the patent, handset vendor, carrier (distribution), and platform perspectives.
Patents
Most of the commentary asserted Google did this deal to secure patents.
I challenge the idea that Google gained meaningful IP to protect Android partners. Motorola’s patent set was primarily feature-phone based, with many java, RF, and handset navigation elements. However, Google’s Android weaknesses stem from its implementation of libraries and licensing schemas within Linux.
While much of that code is java or java-based it is not a 1-1 with Motorola's patents. Note that Motorola already tried to defend itself from Microsoft’s approaches through reliance upon its patents and Microsoft deemed that defense weak enough to sue. Therefore Microsoft will continue to use lawsuits to threaten and enforce licensing restrictions upon Android licensees.
I expect the Motorola purchase to accelerate and inflame the patent wars with Android. As an example of this, Google may well find itself unable to distribute Android devices in the US when it closes the Motorola deal.
Handset vendors
How will other handset vendors respond?
In the short term, they might not care as much as you'd think. Motorola was losing share quickly anyway.
In the long term, Google just openly signalled it will be competing with its partners and that they therefore better be prepared to compete back with content and services. There is real likelihood that Samsung and HTC will react quickly --say within 3-6 months-- to this threat. Samsung in particular is behind in this area and willing to spend its way into new business platforms. Willingness to spend combined with the suddenness of Google's move could well prompt Samsung, LG, and HTC into action they would not otherwise take.
- As I've noted before Samsung has an operating system alternative in Bada. While we are not likely to see Bada in the US within 6-9 months Samsung has the capability of materially affecting Android uptake by further leveraging Bada in non-US regions for the entry-level smartphone consumers.
- HTC is more likely to partner on the content side as it has better resources and strategic fit with licensing deals.
- LG is too far off the game to have this affect them directly.
- Now that Palm is off the table, the Motorola deal also pushes several non-mobile players harder into the space (as they cannot risk Google controlling their set-top/ appliance device footprint) and increases HTC desirability as acquisition target.
Carriers
Verizon: Motorola has been losing share to HTC and a lesser extent to Samsung at Verizon. More importantly, introduction of the iPhone and expansion of “Droid” branding beyond Motorola products has taken the promotional support which Motorola required. Without Verizon’s 100 million dollar campaign behind them Motorola has been in tough shape and needed an exit. Verizon has used the Droid brand to push off core Google services and will now have even more motivation to move away from Google (and Motorola).
All carriers—While a Google phone will have interest to carriers, each carrier has also experienced the risk of this path. With iPhone continuing to command crippling subsidies there will be pushback to resist the same dynamic with Google and Motorola. There will be more support to be gained through partnering with Samsung, LG, and HTC which also serves to at least partially limit or control carrier commoditization (at least relative to a Google produced device).
Platforms:
This deal also signifies an accelerating shift past carriers in the mobile ecosystem. Expect content, app, and service partners to increasingly bypass carriers as the critical path in reaching end customers unless we create more direct partnering models than the current pre-load and per-user license based models predominant today.
On another note, I haven't seen much commentary on the likelihood of successful integration of the Google and Motorola. Google and the devices side of Motorola are a poor cultural fit.
As HP just demonstrated, there has never been a successful integration of service/platform provider and mobile hardware vendor. Recent examples include HP/Palm, Microsoft/Danger, Nokia/Intellisync/Ovi.
Similarly, competing openly with your own channel has a great chance of failing than succeeding for Google. Google has already stumbled with each one of it’s core Apple competitive entries due to channel and content partner conflicts: TV, YouTube/movie, Music.
Summary
Over the 18-24 month horizon, due to patent risk and channel conflict, I expect at least Samsung and probably HTC and LG to release alternative operating systems to Android (although probably also linux-based and capable of running Android apps) or go deep with Microsoft. This makes RIM a likely takeover target, as its new OS has the most direct path to a cross-platform and tools-ready OS. Ironically, Google just made RIM more valuable than it has been in two years. I still think Windows Phone fails in the market but now it takes longer to do so.