Motorola An Android Story

Google has had a problem for a while. The market share numbers of Android are hallow. While Android is winning the market share war, Apple is winning the more valuable customer who purchases more in the App Store, more media and engages in advertising more. Not to mention 25% of Android devices in the 4th quarter came without Google services.

That is gigantic problem for Google because it was giving away Android essentially free and hoping to make money back on advertising and protect its search business. In the companies’ defense their initial mobile strategy was predicted on the fact that if they didn’t act and gain massive market share they could lose their place as the dominant search engine their core business.  A total disaster.

Then problems arose.

Microsoft started winning lawsuits forcing Android manufacturers to have to pay licensing fees to them. Suddenly Microsoft was making more on Android then Google. The secondary problem existed that companies like Amazon with their Kindle and Fire OS took Android and made their own flavors that didn’t use the Google services. The problem was even larger in China where many companies have created their own versions with replacements for all Google apps and services.

Google bought Motorola to take matters into its own hands and for its patent portfolio to fight back. Google was fresh off a loss in a patent auction to a consortium backed by Microsoft, Apple, and Sony and it acted rash. It felt it needed Motorola’s patent portfolio to protect Android.

Unfortunately the Motorola patent portfolio hasn’t even scored many legal victories as it has lost cases to Microsoft, Apple, and had patents for push email invalidated in Germany.

Samsung succeeded with Android where Motorola hasn’t. Then things went awry when Samsung became more serious about development. Samsung began holding developers conferences and made adjustments to its brand of Android.

Google has been trying to tighten the screws and doing that by tying requirements to having the Google Play Store. The problem is Google needs Samsung and its large user base, because Motorola has not been very successful.

While not much is known about the recent Samsung and Google pact which we recently reported as a patent sharing agreement, according to Recode, Samsung will dial back Android tweaks and “multiple sources familiar with the companies’ thinking say the two technology giants began hammering out a series of broad agreements at CES that would bring Samsung’s view of Android in line with Google’s”.

A second plus for Google is that Lenovo (LNVGY) stands a better chance of reviving Motorola like it revived the Thinkpad brand it purchased from IBM and if it does it helps Google diversify from Samsung.

InvestCorrectly Staff
InvestCorrectly Staff

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