Saturday 1 February 2014

Google and Motorola’s marriage was never going to last.Google And Motorola Joins?



Google “married” Motorola – or bought it, if you’re not a romantic about these things – in 2011 for $12.5bn. Some beautiful “children” – the Moto X and Moto G – followed. The G in particular is incredibly well built and powerful for its price, breaking more of the conventions around budget phones than many would like to admit.
 
But barely three years on, they’ve divorced and unusually it’s the poorer partner that’s had to pay up, in the form of Moto’s patents.
 
When the 2011 deal went through, it was the single largest acquisition Google had ever made. Yet take a look at Motorola at the time and you’d have been forgiven for raising an eyebrow. Okay so the glamorous but slightly worn bride had numerous patents – the heavy artillery of the current tech corporate war and a guaranteed high-margin money-spinner for years to come – and $3 million in the bank for a dowry, but clearly all was not well with the company that once put StarTACs and Razrs in pockets all over the world.
 
For all the excellence of the handsets Moto produced under its stewardship, Google’s new partner was not a cheap date, either. In Q2 of last year, Motorola cost Google $192m. It then chewed through a further $248m last quarter. Even for Google that’s a noticeable chunk of housekeeping, and if it really spent $500m on marketing for the Moto X as reported, well, even Charles Saatchi would notice that kind of expenditure.
 
There was denial, too – always a sign of a relationship under strain. In an interview with Wired last year Motorola CEO Dennis Woodside made a clear statement about the partnership with Google saying, “Of course we can’t be a drain on the company forever, but the goal is not necessarily to make massive amounts of money in a short period of time – we have a much longer time horizon than that.” Oops.
 
Now Google has sold Moto to China’s Lenovo for $9.6 billion less than it paid for it, but it’s keeping most of those juicy patents. A cynical person might think Google always knew that, whilst Moto’s intellectual properties were worth their weight in gold, it absolutely was not worth spending billions more to reinvigorate its handset business. It’s not as if Google’s previous ventures into hardware selling have all been unalloyed successes – the first Nexus smartphone was one of the biggest customer-service fails in recent history, while the spherical Nexus Q streamer, er, thing was so warmly received it vanished before it even went on sale.
 
Another point that might have tipped Motorola off that it’s relationship with the Big G would not necessarily be a long and happy one is the latter company’s notoriously expensive roaming eye. It’s made 143 acquisitions to date, according to Wikipedia,  from Usenet company Deja to its recent raft of purchases of cyborg manufacturers, to the 3.2-billion-dollar smart thermostat men at Nest. With Google, a new favoured playmate is never more than a whim away.
 
That’s why Moto’s latest daddy Lenovo should be a much better fit for it. Yes, it is a little ironic that a company that marketed its last big handset, the Moto X, as the Phone of the Brave for true blue Americans, has been flogged to the Chinese. We can all have a good chuckle about that, but the Beijing-based tech giant hasn’t become the fastest-growing PC manufacturer in the world by faffing about with smartphone-connected fire alarms and building the Terminator. Its tech purchases have been well thought-out, including nabbing the esteemed ThinkPad brand from IBM.
 
According to Motorola, the brand will maintain its iconic, ruggedly individual, all-American image despite being run by the Chinese. We’ll see about that, but what’s clear is that Lenovo has bought Moto for its reputation and future prospects as a handset manufacturer. That’s a rather old-fashioned approach and in stark contrast to Google, which is more like a UFO full of probe-wielding Tefal heads who whisk up companies, milk them for patents and expertise, then dump them back in a field wearing a bewildered expression.
The fact that one tech brand has been flogged to another isn’t the biggest deal here, then. Say the word “tech patents” to most people and you’ll be met with a look of mild distaste, like you’ve just broken wind in a lift. And yes, the ongoing legal battles between the tech giants are damaging to innovation and competition. That’s a dreary state of affairs, so three cheers to Lenovo for kicking off the year of the horse by ponying up the cash for Motorola.

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