Tuesday August 16, 2011 4:07 pm
Why Google’s Motorola purchase is a genius move
I was just wondering what Google was going to do to prevent getting shut out of the mobile phone business. It was as if Google was down 1-0 in the bottom of the ninth. With two outs, Google stepped up to the plate and hits a walk-off home run, with its purchase of Motorola Mobility.
This scenario is fascinating for a number of reasons. First of all, somewhere along the line, both Apple and Microsoft took a terrible dislike to this Android nonsense. First, Microsoft cozies up to Nokia to subvert Android (to no avail). Then Microsoft, Apple, and others pulled a trick play to get the Nortel patent assets in an effort to develop a patent portfolio to screw Google.
So Google knows it’s toast if it doesn't do anything. But what would it do? Did anyone call this one? Certainly, not me.
Let's face it, when it comes to mobile phone patents, Motorola easily has as many or more than Nortel, which is more into fiber and other comm patents. Google is now one up on the rest of these folks.
I do various podcasting roundtables, including the X3show, which evolved from the now-defunct Cranky Geeks show. On the show and elsewhere, pundits are quick to write off Google and Android as the long-term losers in the mobile phone business. This was vociferously expressed when Google was locked out of the Nortel deal. And by the way, it was always my assumption that when you are doing any sort of auction, bidders cannot join forces. You cannot go to an auction, find another bidder, and go up to him and say, “Hey stop bidding against me. We should partner up.” I think that in some states that's actually illegal.
But that's what happened to Google and, apparently, it left that Nortel auction with incredible resolve. Also, it managed to keep the Moto deal and the negotiations an actual secret.
Now, Google is on a much stronger long-term footing than either Apple or Microsoft. And you can be certain that the engineers at Motorola are jazzed to the point where all sorts of inventions and ideas will come out of the woodwork.
So what's to come out of this acquisition? Let's look at a few possibilities.
The whopper result will stem from the Google engineers combing over every patent owned by Motorola with fresh eyes. We all know how Apple loves to sue everyone. It's been part of the company’s DNA since the Apple II and the Pineapple computer. Well, let me assure you that the boys at Google can be just as nasty.
Both Microsoft and Apple have been suing Google over various infringements. Last month, an article on TiPb suggested that Android makers have been paying as much as $5 per phone for Microsoft technologies. Who knows how much Apple is getting. The high fees are because Google's portfolio is not worth much insofar as trading patents is concerned. Thus, it gets gouged unfairly. This is just the game that is played because of the way today's generous patent system works.
Like I said, every pundit was writing off Android because of this.
Now watch what happens. You can be sure that every Motorola patent used by Apple and Microsoft—and there must be hundreds—will suddenly be priced up a few notches. I can hear it now: “Well, your honor, this is what our vendors have been charged and we do not see why Microsoft and Apple should be getting a better deal then what we've been getting. We see their rates as the standard.” Microsoft and Apple have given Google precedent for gouging. So gouge they will.
And on top of this, expect the engineers to find plenty of patents that have not been exploited.
You have to assume that all the top players have such huge portfolios that they are rather lax when it comes to exploiting them all. They do a deal so nobody pays anything and leave it go. No longer!
This deal is pure genius. The results will be hilarious.
As for the death of Android? I think not. It’s now a level playing field—the worst possible scenario for Apple and Microsoft.
This article, written by John C. Dvorak, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.
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- acquisitions, adslice, android, apple, google, microsoft, motorola, motorola mobility, nokia