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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