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The business universe was astounded this week when Google announced it was appropriation Motorola Mobility for $12.5B ? a 63% reward to a trade cost (Crain?s Chicago Business).� Surprised for 3 unequivocally good reasons:
- given few program companies pierce into hardware
- effectively Google will now contest with a business like Samsung and HTC that offer Android-based phones and tablets,� and
- Motorola Mobility had flattering most been created off as a viable long-term aspirant in a mobile marketplace.� With reduction than 9% share, Motorola is a final place finisher ? behind even crashing RIM.
Truth is, Google had a tough choice. Android doesn?t make most money.� Android was launched, and labelled for free, as a approach for Google to try holding onto hunt revenues as people migrated from PCs to cloud devices.� Android was grown as a approach to urge a hunt business, rather than as a essential expansion opportunity.� Unfortunately, Google didn?t unequivocally cruise by a ramifications of a product, or a business model, before holding it to market.
Sort of like Sun Microsystems giving divided Java as a approach to urge a Unix server business. Oops.
Then, in early August, Google was slammed when German courts hold that a Samsung Galaxy Tab 10.1 could not be sole ? putting a stop to all sales in Europe (Phandroid.com ?Samsung Galaxy Tab 10.1 Sales Now Blocked in Europe Thanks to Apple.?) Clearly, Android?s destiny in Europe was now severely jeopardized ? and a same could be loyal in a USA.
This wasn?t unequivocally a surprise.� The authorised battles had been on for some time, and Tab had already been blocked in Australia.� Apple has a good determined obvious thicket, and after losing a Macintosh Graphical User Interface lead to Windows 25 years ago Apple did a improved pursuit of fortifying a egghead skill this time around.� It was also good famous that Microsoft was on a stalk to buy a set of patents, or licenses, to strengthen a new Windows Phone O/S designed for launch shortly and quarrel off any other competitors (like Android).
Google had to possibly acquire some patents, or licenses, or severely cruise dropping Android. Google?s serious egghead skill problems positive large authorised losses perplexing to keep Android in a market.� And Android still competence good destroy if Google did not come adult with a obvious portfolio ? and before Microsoft!� Given a miss of profitability in Android, dropping a product unequivocally doesn?t seem that bad ? generally given Google has been on a run of dropping products lately!
Nonetheless, Google care clearly motionless ?in for penny, in for a pound? and bought Motorola. The merger gives Google some 16,000-17,000 patents.� With that kind of I.P. fight chest it is means to urge Android in a internecine wars of egghead skill courts ? where permit trade dominates resolutions between behemoth competitors.
Only, what is Google going to do with Motorola (and Android) now? This merger doesn?t unequivocally repair a business indication problem.� Android still isn?t creation any income for Google.� And Motorola?s prosaic Android product sales don?t make any income either:
Source: Business Insider.com
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