Paul Withers looks at how the recent purchase of Motorola Mobility by Google has increasingly shifted the power between operating systems and hardware providers
Two years ago, news of an operating system buying a manufacturer would have come as a bit of a shock. But when news filtered through that Google is to buy Motorola Mobility for £7.5 billion, it merely highlighted the shift in power between operating systems and hardware providers.
The reliance on manufacturers to adopt a successful operating system is now paramount to their success.
Take Nokia, for example. Its decision to stick with Symbian has arguably been its biggest downfall in recent years, effectively removing itself from the prosperous smartphone market. Its recent profits and turnover show as much.
And while hardware, of course, plays its part, manufacturers are increasingly relying on the abilities of their adopted OS.
But it’s no coincidence that the two dominant players in this market space are those that both provide their own OS and hardware exclusively. BlackBerry and Apple currently lead the smartphone sector with around 28 per cent and 24 per cent respectively. It’s something that will not have gone unnoticed by Google, with its Android OS.
The strategy of Android since day one has been clear. It wants to be on as many devices as possible. And while established players such as Samsung, Sony Ericsson, HTC, LG and particularly Motorola have all hung their hats on it, the same can be said with largely unheard-of budget companies and OEMs.
But it is the high-end bracket that will provide the greater revenues from customers – those looking to purchase applications and games.
Acquiring Motorola was, perhaps, Google’s easiest option in attempting to replicate the model used by RIM and Apple. While the American manufacturer has a credible and established history, its success has plummeted dramatically in recent years.
But the company has made efforts to bring back past glories, ironically through the use of Android. The view from the channel on Motorola is largely very positive. Good quality, innovative kit with a good OS. But customers simply aren’t interested, particularly in the B2B sector.
Nokia will hope its deal with Microsoft to use Windows Phone on its devices will reignite interest in the brand.
If it fails, it’s difficult to see where it goes next. The same can be said about Motorola and Google, with Motorola now seemingly glued to the Android OS for life.
In addition, Motorola Mobility has technology capabilities in the connected home space, in terms of set-top boxes and home automation. Google will be keen to expand its TV service and hope this buy spurs innovation and ignite this market again, taking on the likes of Apple.
But what of its other Android partners? Google’s plans for Motorola aren’t too clear at this early stage, although it has maintained its strategy with Android remains unchanged.
However, the likes of Samsung and HTC in particular, both of which have based a vast majority of their smartphone strategy on the Android platform, may now question their relationship with
Google, fearing it will change as Google might give Motorola preferential treatment.
Windows phone option
Although Google has said it will continue to support its Android partners, it is to be assumed Motorola will be ahead of its rivals when it comes to building devices to meet the needs of new and emerging applications and services.
Should this be the case, its partners would almost certainly look at alternative platforms. Samsung could try to push its own Bada platform but may hit the same walls as Nokia did with Symbian.
And with Apple iOS and BlackBerry OS out of the question, the only feasible option would ultimately be Windows Phone.
Google is the first operating system to purchase a manufacturer, but it’s a safe bet to say it won’t be the last.