Why Motorola will not be the exclusive Android manufacturer

Why Motorola will not be the exclusive Android manufacturer
We've talked about Gene Munster before, a talented analyst at Piper Jaffray who tends to skew towards the Apple side of the spectrum, but that doesn't mean that he's ever completely off (at least when he has a reasonable sample size of data behind his "analysis",) but that does mean that Mr. Munster has a bit less credibility when making claims about non-Apple products. His latest claim is that if Google and Motorola form that special bond, wherein Google uses Motorola as the exclusive Android maker, it would kill the Android platform. Let's break down that statement:

Suspension of disbelief

The hypothetical used here is pretty far out there. Munster wants us to believe that it is possible in his world that Google would close a platform that it has been fighting to keep open. We need to assume that Google will also willingly cut out all other hardware manufacturers in the Android ecosystem to make Motorola the exclusive manufacturer. No more HTC, no more Samsung, no more cheap Chinese knock-offs, just Motorola devices and that's it. Everyone following along? Good. Anyone out there believe that this is an actual possibility? Probably not. 

Munster goes on to put hypothetical numbers behind this hypothetical scenario, because that's how you get people to believe that you've done actual work. Munster claims that if Google decides that the best option for Android is to chop off its arms and legs, the market share of Android will drop from a projected 43% in 2012 to just 15% in 2013, and ultimately settling in at around 20% in 2015. Surprisingly, Munster doesn't expect the iPhone to fill that gap, but instead projects an unnamed "other" OS to swap places with Android and climb from 14.4% in 2012 to 44.5% in 2013. We can't say what "other" OS this may be, but since Android, iOS, BlackBerry, and Symbian are all on the chart, it seems reasonable to assume he's referring to Windows Phone

Back to reality

Munster even goes so far in showing his lack of understanding with Google strategy (and the absurdity of his hypothetical situation) by saying that Google would end up losing $4.5 billion in ad revenue from the loss of market share if Android were to become a Motorola exclusive. Yes, Gene, that's exactly why your scenario makes no sense, and why Google wouldn't kill its own platform for exclusivity with a hardware manufacturer. Google doesn't care about having the single most popular device. Google wants Android ubiquity, because then all roads lead to Google ads. 

Eventually, Munster reaches the same conclusion that just about everyone else did a few minutes after we learned of the GooMoto acquisition: that Google made this purchase for the patents. And, that Google may keep the patent portfolio, but sell off the hardware businesses. While this certainly is a possibility, it seems far more likely that Google will hold on to the hardware side, but continue to run it as a separate business (like Larry Page has said would be the case.) With this setup, Google could have a subtle influence on Motorola Android handsets, and could perhaps lead Moto to be a stock Android-only manufacturer. We'd certainly throw a parade for the end of MotoBlur. On top of that, Google would have influence on Motorola, which has a large share of TV set-top boxes, which could lead to more GoogleTV devices, and with GTV will soon come the Android Market, apps, and of course more Google ads.

Check back in next week when Mr. Munster creates a pie chart to describe the market effects if Apple decided to open up iOS and begin licensing it to outside manufactures!

source: SlashGear
Thanks to remixfa for the additional artwork

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62 Comments

1. Sniggly

Posts: 7305; Member since: Dec 05, 2009

Good analysis of a bulls**t analysis, Michael. The reasoning you used in this article is exactly the same kind I used to determine that no, Motorola would never be stupid enough to patent troll Android or other OEMs. They would be shooting themselves in the foot. Yet CNN is insisting on this scare mongering, declaring that the "user friendly iPhone" will also fill the gap left behind as all the other manufacturers RUN AWAY!!!! from Android.

4. MichaelHeller

Posts: 2734; Member since: May 26, 2011

I'm pretty sure that the threat to patent troll other Android OEMs was just a push to get Google to buy the company. Ugh, CNN. I don't even have the strength to put down such a sad, out-of-touch company.

6. protozeloz

Posts: 5396; Member since: Sep 16, 2010

are you guys hatting on CNN?...... may I join? I don't know how people trust CNN for anything (not only tech news) they don't give objective news at all

7. MichaelHeller

Posts: 2734; Member since: May 26, 2011

Probably best to not even start the discussion of TV "news", which is essentially just entertainment (which may or may not be entertaining), and almost never informative. I've said it before, I'll say it again, the US needs to adopt laws like the UK where stations like MSNBC and FoxNews would be deemed entertainment channels, and not be allowed to advertise as news or be listed with news stations. Of course, in doing that the only news stations left in the US would be CSPAN and BBC.

8. remixfa

Posts: 14605; Member since: Dec 19, 2008

the Communist News Network? I can hardly believe they do scare stories on Free market systems like Android and push highly controlled big brother systems like Apple.. lol. I think you had just the right amount of sarcasm in there Micheal.. :) People that keep this fear mongering of "google is going to control android through motorola exclusivity" crap have no idea how android works and why its so big. Its not about any single device or company sales.. its about being on EVERYTHING and EVERYTHING. In order to give moto some huge preferential treatment that pisses off other manufactures or give them exclusivity to android would be the exact opposite of everything google has been trying to accomplish with android. and it would cut them off at the knees.. permanently.

9. MichaelHeller

Posts: 2734; Member since: May 26, 2011

It's not even a lack of understanding Android, it's a lack of understanding Google. Google doesn't do business like most companies do, because most Google products aren't an end-game. Most are just routes to the web and Google ads.

16. protozeloz

Posts: 5396; Member since: Sep 16, 2010

Indeed Google gains from as many users as they can get and not just exclusive services its why they push apps for as many OS's as they can even if they keep some neat tricks for their platform their main plan sticks the same to get as many from ads as possible

11. remixfa

Posts: 14605; Member since: Dec 19, 2008

BTW micheal, we need more guts and gore on the android. :) if this guy is trying to convince us that google wants to commit StupiCide then that poor robot should reflect it.. lol :)

12. MichaelHeller

Posts: 2734; Member since: May 26, 2011

My Photoshop skills aren't the best, but if you want to whip up an Android committing seppuku, I'll swap the image.

15. protozeloz

Posts: 5396; Member since: Sep 16, 2010

And I was wondering why the red on the Android robot .... silly me

18. protozeloz

Posts: 5396; Member since: Sep 16, 2010

Maybe a Motorola catapult? With Android on it and a spiky wall?

21. remixfa

Posts: 14605; Member since: Dec 19, 2008

micheal, ask and u shall recieve. check the PA mailbox. :)

23. MichaelHeller

Posts: 2734; Member since: May 26, 2011

It doesn't look like that's forwarded to me. Try either the tips e-mail or michael.h @PA

26. remixfa

Posts: 14605; Member since: Dec 19, 2008

resent it to micheal.h@phonearena :)

28. MichaelHeller

Posts: 2734; Member since: May 26, 2011

Ha! Apparently, I don't have an official PA e-mail. send it to tips@PA and I swear it'll work this time.

29. remixfa

Posts: 14605; Member since: Dec 19, 2008

lol.. i sent it again to the tips email. 3rd try is the charm right? lol

30. remixfa

Posts: 14605; Member since: Dec 19, 2008

ahh, that picture is much better. hope everyone likes it.. lol :)

25. PeterIfromsweden

Posts: 1230; Member since: Aug 03, 2011

Actually, BBC had a article where they said it was likely Google would start making their own hardware. And seeing Samsungs reaction to this, by hiring software developers, i think it is higlhly likely that Google will start making their own hardware.

27. remixfa

Posts: 14605; Member since: Dec 19, 2008

you just wanna think that because u think it will make BADA relevant. lol.

31. PeterIfromsweden

Posts: 1230; Member since: Aug 03, 2011

It really does make sense, that Google will start making their own hardware, it is a no brainer. Google doesn't spend 12.5 billion $$$ on buying Moto and then don't do anything with the purchase. bada is already the number 5 OS worldwide, but i do think this helps bada, because Samsung will start pushing bada more than Android. Seriously, think of it from a nuetral perspective (i do). Google spends 12.5 billion $ on buying a hardware company that has lots of patents, but also of course makes hardware. They will of course use the patents they hav purchased, but of course they also want to take advantage of the hardware they have bought as well.

32. remixfa

Posts: 14605; Member since: Dec 19, 2008

peter, google spent 12.5 billion buying moto's patents at the current going rate of patents. Moto was thrown in for free. Are they likey to tweak moto in some way shape or form to make it better? absolutely. Are they going to do anything to jeapordize their relationships with other manufacturers and hurt android's massive sales? Absolutely not. Google is in the business of selling ads.. to everyone. making moto the primary phone manufacturer and pissing off everyone else only HURTS them.. Again, u just want it because u think they will push BADA.. lol. #5 OS behind WebOS.. a dead OS.. lol

37. PeterIfromsweden

Posts: 1230; Member since: Aug 03, 2011

Are you saying WebOS has more market share than bada ? That's wrong. Number 1 is Android. No. 2 i IOS. No. 3 is Symbian. No. 4 is BBOS. No. 5 is bada. No. 6 is WP7 / Winmo No. 7 is webOS. Maybe WebOS has more market share than bada in the Us, but that is not the case worldwide.

39. remixfa

Posts: 14605; Member since: Dec 19, 2008

i live in the US, not sweeden, the numbers I care about are on this side of the pond... for the most part. :) i dont think bada even exists here.. lol.

59. PeterIfromsweden

Posts: 1230; Member since: Aug 03, 2011

These numbers is the worldwide market share, that means all the contries in the world total market share. Not only Sweden.

33. protozeloz

Posts: 5396; Member since: Sep 16, 2010

1. Why is your point of view neutral when the only option you consider is Google making it's own hardware? Mostly you want Bada to become Samsung main os in the hopes it becomes popular. Now you must consider many other factors that should be taken in notice when it comes to companies. -Motorola could have great value as a company but it has little as an Android manufacturing company. Outside US their reputation is low. And they are still loosing money. Also take to account that it's also not the one with the great gainings among manufacturers . Siding with Motorola only and forgetting the others would actually hurt Google' earnings because their population of users will be drastically reduced. Now lets take for example Samsung. Their.biggest appeal on smartphones is now Android they can brag about the thousands of applications and services the OS offers. They get informed on the new bugs and their fixes so they have to just work on their UI and they have a whole ecosystem and a line of products and their worries are a little. If they cut Android and go all Bada they will have to invest in promoting the UI invest in more features invest in more security so its money money money they will also loose while trying to make their OS competitive, as they have to start from nearly 0 with no community support (compared to Android) and no one who has an idea what's Bada . Out of Google making Android a moto exclusive or Samsung leaving Android for Bada its only money Los Now how can Google piss Samsung to the point they will leave? They have said Android will remain open. And Samsung is part of the open handset alliance. If rumors are true then they must also have ICS on their hands for testing. Even if Google makes only moto nexus is still not a reason for them to leave as they can use the source and make the galaxy S3 or 4

34. remixfa

Posts: 14605; Member since: Dec 19, 2008

exactly. the top 2 selling android handsets of all time are the galaxy1 and galaxy2.. and the galaxy2 isnt even in america yet. samsung isnt ditching android. bada isnt going to be a main OS. they may make it for feature phones down the line and keep it alive on the side... but it will never be their bread n butter. BTW, that picture i made i was thinking of your wish for google to kill android.. lol.

40. protozeloz

Posts: 5396; Member since: Sep 16, 2010

My wish? :o

35. MichaelHeller

Posts: 2734; Member since: May 26, 2011

$12.5 billion could easily be just for the patents alone to protect Android and other properties. Moto is also in set-top boxes, which Google would love to get Google TV onto. Google certainly could make their own hardware, but: A) Google has never been a hardware company, B) They have a lot of hardware partners that they need to keep happy. Imagine if the next Galaxy S phone were Windows Phone 7 rather than Android. That's far worse for Google than the possible gains from making their own hardware.

2. Whateverman

Posts: 3295; Member since: May 17, 2009

I could only hope this means the end of Blur, or at least making it an app. But I must agree, there is no way Google will make Android exclusive to Motorola products. That would be suicide. They should even think about changing the name of the company from Motorola. It's a risky move, but one that could pay off big time. Motorola ruined it's own name and it's big comeback with blur IMHO, so this could be the start of a brand new chapter in Shaumburg.

3. Sniggly

Posts: 7305; Member since: Dec 05, 2009

The concept of Blur has always been good, it's just the execution which has been problematic. If they could make Blur run very light and with no glitches, then it would be the second best custom UI out there after Sense 3.0.

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