Google 'Supercharging Android' With Acquisition of Motorola Mobility

[ksgant]

Next time try leaving the coffee shop of the convention center, lol.

Or failing that, try actually finding out whats going on around you....

But to answer your question... yes. The vast bulk of Mac users are hipsters and soccer moms that don't know the difference between FAT16 or EXT3 (or even what they are)

Thanks for your response. No, I walked all around the different places. Yes, we know that the PWN2OWN cracks the Mac...but the fact of the matter is that most of these guys use Macbooks. Sorry to go against your well researched "facts", but I'm just saying what I'm seeing when I go to these things.

You linked to a 2 year old article, but indeed, they did the same thing this past March. I was at both events, both times the cracks of Safari...by Charlie Miller and this year by some dude at VUPEN...both were carrying around Macbooks before..and of course afterwards because that's part of the prize. Charlie decided to go after the iPhone this year.

But anway, those are just my observations of these events. I'm assuming that you weren't there as you would have seen it for yourself. I'm sure you're right about everything else though because you sound like a thoughtful, respectful, intelligent person. I mean, why else would you come here to a site that's Apple and Macintosh centric to post? For instance, I don't go to Windows or Linux centric sites to post on their forums about anything. I can only guess you like coming here and spending so much time because you enjoy the stimulating conversations you start.

Hopefully you'll continue to post more to show everyone your obvious expertise and knowledge of such things.

 

[deconstruct60]

Android obviously does violate patents. As evidenced by the fact that Android manufacturers are paying Microsoft to license patents.

Paying just indicates paying. Sometimes people pay because paying is cheaper than paying the lawyers to knock the patent down. It is all a big shake down game at this point. Either your stack of patents is bigger than theirs (so there might be something in the stack that is a tough court case) or you pay people off. Guido the mobster can provide more insight on the game then any deep technical evaluation of patents.

 

[BaldiMac]

Paying just indicates paying. Sometimes people pay because paying is cheaper than paying the lawyers to knock the patent down. It is all a big shake down game at this point. Either your stack of patents is bigger than theirs (so there might be something in the stack that is a tough court case) or you pay people off. Guido the mobster can provide more insight on the game then any deep technical evaluation of patents.

I'm not sure what you are trying to say. I was offering evidence, not proof. Are you trying to argue that Android does not violate any patents?

 

[divinox]

if anything this makes Microsoft acquisition of a hardware vendor less likely. they are the last independent mobile OS offering standing (Apple ios/iphone , HP webOS/hardware , RIM OS/hardware , Google OS/hardware) . if they buy something they loose that differentiation and opportunity to stir the FUD pot. Microsoft isn't hurting for patents. So they don't need to buy Nokia for protection and like to use FUD.

If Google and Microsoft 'settle' for like a $1-2/device tax for Microsoft, I suspect they will walk away happy and just cash the checks. That's even cheaper than paying billions to buy a hardware company.

The mobile OS vendor who can get a broad, diverse set of hardware made for their system will have the dominate advantage to the largest (in terms of numbers) in the market. Over time Apple is going to shrink till they are a minor, but profitable, player.

Good solid post. If MSFT for some reason need to dump more money at Nokia theyll probably buy their maps/navigation before anything else. From what i've heard MSFT has a real map issue outside of the states (licensing makes much more sense though for all parties. Only problem i see here is that a deep integration in the Wp-platforms might piss off other OEMs if costs are pushed down their throats. Then again, it's probably solvable).

Your last paragraph is spot on too.

 

[deconstruct60]

Arguably Motorola products will improve with their closeness to the source of Android software, though.

Moto had already 'bet the farm' on Android; at least on mobile phones.
For example

http://gigaom.com/2009/11/10/heres-why-motorola-bet-on-android/

I'm not sure how much closer they can get. The only thing can do is stop trying to put a different layer on top. MotoBlur (which many try to remove anyway) will go away but they had already committed to moving the whole phone/tablet line over to Android a couple years back.

If anything they were the only ones to bet everything on Android so it contributes a bit to them being bought. That in addition to the patent issue.

In short, Google doesn't have to hand out new marching orders after acquisition. Motorola had already fully committed to Android. So there is really not much of a change. maybe the license fees are a bit cheaper, but it isn't like they are now going to drop the Windows and palm phones. Or the windows cable box (if they exist... those might be a more natural fit for Chrome OS though with a few tweaks. ).

 

[Naimfan]

i have no doubt that MSFT will have a majority of the (multi-platform) market in 2015 (>60%).

[Sic]

(Emphasis added.)

That's the entirety of your attempt at an argument: Your assertion, completely devoid of any factual data, that "I have no doubt . . . "

Good luck with that.

 

[divinox]

You don't understand how business works. Of course Google's licensees said this. What else are they supposed to say? If they speak up, their own stock takes a tumble (because investors fear for future sales and uncertainty as to OS), they alienate google (with possible reprisals being obvious to ascertain), etc.

Google didn't just pay $12B for patent protection they could have gotten for $4B. They paid $8B extra to compete with their own licensees.

Your reasoning is seriously flawed. If we are to take your view on "how business work", and go with the simple assumption that major players on the stock market knows "how business work", then we would see stock plummeting regardless of what CEO:s say.

 

[deconstruct60]

I'm not sure what you are trying to say. I was offering evidence, not proof.

it isn't even evidence let alone proof. At this point paying is just paying.

Are you trying to argue that Android does not violate any patents?

No. Just that paying is not indicative of anything in relation to patents. It is only evidence in participation in the patent game, not the patents themselves.

Frankly, with properly structured goobity-goop write up and a tall stack of paid fees, I bet you could get a patent on farting through the patent office. They don't really care anymore as long as it meets enough of a threshold to be plausible. They even collect more fees when retest them and it goes to court.

So it isn't just whether a patent got violated. It is whether a valid patent got violated. The only way to find out it is a valid patent is to test it. Paying is becoming a completely different exercise.

 

[divinox]

[Sic]

(Emphasis added.)

That's the entirety of your attempt at an argument: Your assertion, completely devoid of any factual data, that "I have no doubt . . . "

Good luck with that.

I could provide a lengthy argument pointing at numerous facts and mechanisms that support this claim. Well, ok, 2015 is probably a wee bit early for saturation (make it 2017 or so), and of course exclude large parts of "the emerging markets" (BRIC etc.), and yes. An above 60% share of the total (multi-platform; i.e. from phones to pc:s) is likely.

I seriously doubt that doing so is worth the effort though, at least not for this crowd.

p.s. as for "factual data" I dont see any crystal balls out there, so how you expect me to provide "facts" about the future is beyond my ability to comprehend.

 

[BaldiMac]

it isn't even evidence let alone proof. At this point paying is just paying.



No. Just that paying is not indicative of anything in relation to patents. It is only evidence in participation in the patent game, not the patents themselves.

Frankly, with properly structured goobity-goop write up and a tall stack of paid fees, I bet you could get a patent on farting through the patent office. They don't really care anymore as long as it meets enough of a threshold to be plausible. They even collect more fees when retest them and it goes to court.

So it isn't just whether a patent got violated. It is whether a valid patent got violated. The only way to find out it is a valid patent is to test it. Paying is becoming a completely different exercise.

Circumstantial evidence is still evidence. The fact that a large company is willing to pay to license a patent is indicative of their belief in the probable validity of the patent.

 

[Tigger11]

Yeah, Google is really hard up for cash. And $10,000 won't buy even a crappy application for any phone. But yeah, it's a defensive move, what were you expecting them to do, lie down and give up? Arguably Motorola products will improve with their closeness to the source of Android software, though.

This is a very clever move by a very clever company.

I dont think anyone said they were hardup for cash, but they just spent 1/3 of there cash to pay a 63% premium on a company whose patent portfolio has only scared other Android vendors and not its competitors (ie Microsoft and Apple, both who are currently suing motorola). All of this to support a phone OS that Google has yet made break even according to there own reports, all of this with a 20% cancellation fee. There is a reason Google is down today, its not a clever deal on their part according to most on Wall Street. If business segment doesnt make money, spending $ 12.5B on it probably isn't the way to make it into the black. None of which helps this with Android's biggest problem Sun Systems current owner Oracle. Google is likely to need alot of that cash when the final judgement comes down.

 

[aohus]

I dont think anyone said they were hardup for cash, but they just spent 1/3 of there cash to pay a 63% premium on a company whose patent portfolio has only scared other Android vendors and not its competitors (ie Microsoft and Apple, both who are currently suing motorola). All of this to support a phone OS that Google has yet made break even according to there own reports, all of this with a 20% cancellation fee. There is a reason Google is down today, its not a clever deal on their part according to most on Wall Street. If business segment doesnt make money, spending $ 12.5B on it probably isn't the way to make it into the black. None of which helps this with Android's biggest problem Sun Systems current owner Oracle. Google is likely to need alot of that cash when the final judgement comes down.

please also note that the acquisition is not final, and will undergo antitrust scrutiny. I feel as though it will pass though. I think this was more of a defensive move on Google's part. Could be a potential for a lose lose situation. We'll see though.

 

[divinox]

Not necessarily. Firstly, as I understand, Motorola has more patents than Nortel and those patents are much more relevant to mobile domain. So, they probably should be valued at $8B right away. Secondly, it's not like Google had many options. Even if they did not want to compete with Android licensees they kind of had to buy Motorola anyway. It does create an "interesting" situation though. They said that they will provide equal access to Android to both Motorola subsidiary and licensees. Perhaps they will try to sell Motorola assets eventually.

From what i've read lately MMI was going down the so called drain, and unless the other parts of MMI was cash-cows (or MMI had a nice cash), 8bn might not even be enough.

As for the idea (not yours) of buying patents and licensing them out, what would MMI do without their patents? What would they be? Have a really hard time seeing that as a good move, and i doubt the shareholders would accept it either (unless they paid a ton ofc.).

----------

The ITC disagrees with you.



You do realize that they can't be a "separate company" in the way you mean, right? Google "will run Motorola Mobility as a separate business." It's run by Google. It's profits and losses ultimately accrue to Google.

They can, and will (likely) be a separate company like he said. Yes, they will be owned by Google, but they do not really need to go any further than that. As for profits and losses they do not (necessarily) "ultimately accrue to Google", other than by change in value of the asset (quite obviously).

 

[BaldiMac]

please also note that the acquisition is not final, and will undergo antitrust scrutiny. I feel as though it will pass though. I think this was more of a defensive move on Google's part. Could be a potential for a lose lose situation. We'll see though.

What is the distinction of a "defensive move" in this context? They bought the patents to use against Apple and Microsoft. That seems like an offensive move to me.

 

[deconstruct60]

You don't understand how business works.
....

Google didn't just pay $12B for patent protection they could have gotten for $4B. They paid $8B extra to compete with their own licensees.

No. Google paid $8B more so they can make back the $4B they paid to get the patents. Moto (properly run) would have made money selling Android phones whether or not Google bought them. Stop. read the previous sentence over until realize that is the key to the acquisition. There was no need at all for Google to buy one of the vendors for the vendors to make money selling the phones.

Sure the margins may be a bit better post acquisition. The Moto subsidarary will not find it hard to get the 'best price' on licensing. However, if Google wanted to maximize Android profits by owning the whole stack they'd would have made Android closed source. It isn't. Backtracking now on open/closed will only hand the market to their competitors. That would be a bad business move.

If Google is willing the share some of the wealth with the other hardware vendors then they can beat the other closed source alternatives over time with a broader, healther ecosystem of products. That's what the Android game plan has been from the beginning and so far it is working extremely well (pasted Apple in units sold from practically nothing when many the pundits crowed how Apple's lead was insurmountable and they'd never catch up.)

The big problem Google has is making sure the right set of folks are running Moto. it will be a different crew and they'll need a bit of latitude in getting things done. However, that is key. It isn't like Moto was lacking talent during the slump. It was execution that screwed them up.

The difference in cultures isn't a big deal if Google doesn't fully integrate them into one company. Unless google's margins tank there is no huge need to do that and lots of reasons not to (helps maintain the other Android partners where there are externally visible borders between units. )

Big business know about co-opetition. Apple used Samsung for parts but competes with phone. IBM will run Oracle DBs for you if you pay them. HP will manage your IBM mainframes for you. As long as Google doesn't saddle Moto with an unrealistic profit margin target it can easily work if just both halves just execute what they were already doing.

 

[divinox]

And yet that was exactly Google's reasoning when the Apple consortium purchased the Nortel patents.

Android obviously does violate patents. As evidenced by the fact that Android manufacturers are paying Microsoft to license patents. And the fact that Google feels the need to acquire patents to "defend" Android. Why would they spend $12 billion to defend Android against patents that it doesn't violate?

Non seq. Android OEMs could pay licensing fees for various - non Android-related - reasons.

As for the second part, with all the nutty patents out there I think its safe to say that anyone and everyone is probably violating a ****-ton of patents. I guess Google thinks that this acquisition is a nice way of creating a Nash equilibrium and putting an end to this patent law-suit nonsense we are currently seeing.

 

[aohus]

What is the distinction of a "defensive move" in this context? They bought the patents to use against Apple and Microsoft. That seems like an offensive move to me.

I see it as a 'defensive' move in that Apple/Microsoft will have a tougher time making claims of patent infringement. I highly doubt that Google will start filing patent lawsuits against its competitors. Why should it? 550k activations / day.

Patent lawsuits are used only when said company is losing influence/market share. Its been Microsoft's MO for years now.

 

[Naimfan]

I could provide a lengthy argument pointing at numerous facts and mechanisms that support this claim. Well, ok, 2015 is probably a wee bit early for saturation (make it 2017 or so), and of course exclude large parts of "the emerging markets" (BRIC etc.), and yes. An above 60% share of the total (multi-platform; i.e. from phones to pc:s) is likely.

I seriously doubt that doing so is worth the effort though, at least not for this crowd.

p.s. as for "factual data" I dont see any crystal balls out there, so how you expect me to provide "facts" about the future is beyond my ability to comprehend.

Thank you for agreeing that your attempt at argument is based simply on "I think this, therefore it will be."



Nokia has been hemorrhaging smartphone market share, falling to 22.1% from for Q2 2011 from 40.9% in Q2 2010, and only teamed with Microsoft so it wouldn't have to invest in developing a next generation of Symbian. Similarly, Microsoft's share of the smartphone market has plummeted to 1.6% from 4.9% for the same quarter last year.

Meanwhile, market share for Android and iOS skyrocketed, with Android jumping from 17.2% to 43.4% and iOS climbing from 14.1% to 18.2%.

Kindly explain how Nokia and Microsoft can reverse that trend?

 

[Tigger11]

please also note that the acquisition is not final, and will undergo antitrust scrutiny. I feel as though it will pass though. I think this was more of a defensive move on Google's part. Could be a potential for a lose lose situation. We'll see though.

The issue is that even if it doesnt clear Antitrust, Google is still out $2.5B as a cancellation fee, which is over a 1/3 of what MMI were worth on Friday. A 20% cancellation fee is virtually unheard of, especially on a deal this big (the AT&T - Tmobile one is bigger in value at $3B but a much smaller percentage at less then 8%). Three weeks ago Carl Icahn (MMI's largest stock holder) was trying to get MMI to sell the patents, now instead Google buys MMI for a big premium, a company that many in the android community already think Google gave an unfair advantage too with Honeycomb and their Xoom tablet, now the favored son is a wholly owned subsidiary, plus it really puts a damper in on the Google TV arena. Cable companies and Nokia are probably the big winners of the day, plus anyone who had MMI stock on Friday.

 

[powers74]

Well...

....








Looks like Google just became a hardware company...

 

[Thex1138]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_5 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8L1 Safari/6533.18.5)

If the Linux community start exercising their licensing muscle it could all be for nothing..

 

[vitzr]

Oh my, this topic has certainly stirred up a lot of emotion in the Mac Camp.

You'd think Apple was the underdog based on some of the posts. Check the figures, Apple is far ahead of the rest. Have we forgotten this so easily? Where's the confidence in Apple?

I really like My_Macs and other Apple gear I have. They're great, been using Apple computers for years.

Yet I certainly don't feel threatened by this, as some here do. I don't see what the big deal is. The huge number of posts is very telling.

It's only business people

 

[aohus]

Oh my, this topic has certainly stirred up a lot of emotion in the Mac Camp.

You'd think Apple was the underdog based on some of the posts. Check the figures, Apple is far ahead of the rest. Have we forgotten this so easily? Where's the confidence in Apple?

I really like My_Macs and other Apple gear I have. They're great, been using Apple computers for years.

Yet I certainly don't feel threatened by this, as some here do. I don't see what the big deal is. The huge number of posts is very telling.

It's only business people

this kind of mindset is wrong. This 'us' vs 'them' mentality has got to stop.

Apple is going nowhere. Google is going nowhere. Competition will breed great innovation on both sides.

 

[deconstruct60]

What is the distinction of a "defensive move" in this context? They bought the patents to use against Apple and Microsoft.

The same Apple and Microsoft who are filling numerous courtrooms with suits/preliminary injunctions and shakedowns for royalties. Apple and Microsoft have already been attacking Google. Just by indirect movements. Bulked up, Google can step in and stop the shakedowns.

Just like how Apple is having to step in and protect the iOS developers from the shakedowns.

Microsoft already had a cross license agreement for the Nortel patents. Why were they bidding on them? Why did they jump into an even larger consortium to buy what they already had access to at an even higher price??? Likewise why did they throw in with Apple to keep them out of Google's hands. Those patents were clearly overpaid for. I bet that collective never makes back what they paid in licensing fees.

When Nortel went bankrupt they had $4.5B in debt. If they could have gotten $4.5B buy just holding an auction and getting a lifetime access to the patents, they'd still be in business and practically debt free.

 

[mtrctyjoe]

Samsung and HTC are Toast

Well, motorola mobile - is one big ugly beast - all those people and different models of phones - just the effort to streamline everything will be monumental - and here is Googles first mistake - you can not buy something this big and make sense out of it any time soon - they will lose focus, get distracted and this will be a mistake for them - while Apple - with LASER focus - keeps making one simple design - better and better and better ......