What better way to start the day than by firing up your computer and the first thing you see is a major shake up in the mobility space. Google has decided to buy Motorola Mobility Holdings for $40 per share, or 12.5 (insert Doctor Evil tone) BILLION dollars. That’s only a 60% premium on Friday’s stock price. Holy cow. That’s a LOT of money and you can read the official commentary from Google here.
Now here’s where it gets interesting. One paragraph caught my attention:
This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.
So basically, Google did exactly what Microsoft did (anoint a premium “partner”) but at a significantly higher cost (and a total guarantee that the OEM partner will not use any other platforms for their hardware). But here’s where I think it gets supremely interesting. Why did Google buy Motorola? For the hardware? Sure. But is that worth a 60% premium. Heck no!
I would bring up IP as a very important for differentiation [among Android vendors]. We have a very large IP portfolio, and I think in the long term, as things settle down, you will see a meaningful difference in positions of many different Android players. Both, in terms of avoidance of royalties, as well as potentially being able to collect royalties. And that will make a big difference to people who have very strong IP positions.
Interesting how the long term was only a few days, no?
There’s also another interesting twist to all this. In January, Motorola Mobility announced its acquisition of 3LM – a company that makes Android “enterprise friendly.” This was part of Motorola Mobility’s strategy of differentiating itself from other Android vendors by providing better tools for deploying Android devices in the enterprise. The question becomes now, does the 3LM code get baked in to ALL Android devices or is this going to remain a Motorola property? (Remember that 3LM’s intent is to license its technology to other Android vendors)….heck take it a step further. If Motorola is going to be run as a separate business, are they going to still try to license their IP to other Android OEMs or is that all moot now?
The answer is: Only Time Will Tell. It’s a crazy world out there in the land of (enterprise) mobility and Sanja Jha has shown us that the “Long Term” isn’t that long. I’m sure the good people at HTC, Samsung and LG (never mind the OTHER Motorola) are thinking long and hard about who they are going to bet on moving forward: Android or Windows Phone.