Apple designs its gadgets' hardware and software. Google wants to do the same
Since 2008, Google has given away its Android operating system to entice gadgetmakers to build products around it. Dozens of manufacturers of mobile devices have done so enthusiastically, releasing hundreds of Android products. It's a radically different strategy from that of Apple, which designs the iPhone's software, hardware and services itself — a philosophy that Steve Jobs has called owning "the whole widget."
But with the Aug. 15 announcement that Google is buying hardwaremaker Motorola Mobility for $12.5 billion — by far Google's biggest acquisition — the search-engine giant declared that it intends to get into the widget business. If the deal goes through, Google will be able to produce exactly the phones, tablets, TV boxes and other gadgets it wants. It could change everything for Android and for the consumer-electronics industry.
Or not. Motorola Mobility is an unprofitable company that used to be part of Motorola, which invented the cell phone in 1973 but has struggled in the iPhone era. Motorola spun off its ailing phone division in January. And Google says one key reason it is plunking down so much money for the recently dumped Motorola Mobility is to acquire the gadgetmaker's bulging portfolio of more than 17,000 patents, a potentially bacon-saving move in an era in which tech companies seem to spend as much time squabbling in the courtroom as competing in the marketplace. For example, Oracle is suing Google, claiming that Android violates Oracle's Java patents, and Apple and Microsoft are pursuing cases against multiple Android devicemakers, including Motorola Mobility.
If Google uses all those Motorola patents to make its operating system a less juicy legal target, it will come as a relief to Android licensees such as HTC, LG, Samsung and Sony Ericsson, all of which released statements endorsing the takeover. Behind the scenes, though, these companies can't be ecstatic about the prospect of a united Google-Motorola releasing Android gizmos that compete with theirs. Google understands that, which is why it's emphasizing its commitment to keeping Android open and saying it plans to operate Motorola Mobility as "a separate business."
Consumers, however, have every reason to hope that Google mind-melds with this gadgetmaker to produce a phone that is a true competitor of the iPhone. As successful as Android has been — the operating system was on 43% of smart phones sold in the second quarter of this year, according to research firm Gartner — it still hasn't appeared on any devices that are as polished, popular and downright iconic as the iPhone or iPad. In large part that's because hardwaremakers have often served the software poorly, burying it under sluggish custom interfaces and failing to release updates in a timely fashion. By making its own hardware, Google might give Android devices the purity they've lacked to date.
Still, there's no way in the near future that Google hardware will rival the work of Apple, a company with a relentless, enormously successful focus on building the best, best-integrated devices in the world. Megamergers that promise to change everything have a spotty record of changing anything, at least for the better. (Three words: AOL Time Warner.) For all its risks, this Motorola deal has the potential to make history, if Google sees it as a way to create cooler products as well as ward off lawsuits. And when a company has a chance to build better widgets, it would be awfully sad if it didn't even try.