Why Google Bought MotorolaPosted to safelyignored.com on .
It is obvious that Google purchased Motorola to establish a stake in mobile handset production to ensure Android’s future and consumption of Google services. So obvious it makes me curious about alternate explanations.
Whispers around the industry left me confident Motorola was putting serious resources into “BlurOS” from early 2010 until the Google agreement. If this project had been successful, it would have set a precedent that might greatly diminish the power of the OHA (which Google controls via the CTS) by demonstrating that established hardware designers can bootstrap their own software ecosystem. Many similar threats have surfaced (Sony’s SNAP, Tizen and its ancestors, WebOS) but have generally proven impotent. I believe Motorola’s effort was unusually robust and well-guided, so Google must have been very interested in shutting it down.
(I have seen some strong encouragement from Google for OHA members to stay loyal, but cannot share those stories. Since then, though, Aliyun has required public response and Firefox OS has emerged as a credible play. I have my popcorn ready to watch how the latter affects Google’s relationship with the Mozilla Foundation.)
An even more speculative motivation for the acquisition comes from the inevitable future of mobile payments. With Google’s ability to monetize behavioral data, this is an extremely rich but crowded world: Square has traction, the US carriers have their own plans, retailers are banding together, and it seems every existing payment processor and device designer has their own plan. Google must have a few strategies to prevent marginalization of Wallet.
Although the press seems focused on the handsets, which are often replaced every two years, the other side of the “swipe to pay” equation has a more lasting effect. LevelUp sidesteps today’s legacy using commodity devices and Square adds to that attack by integrating with traditional card payments. But in any event many terminals have to be replaced for compliance with PCI standards before 2015. This means major retailers are putting deployment plans in place today, and by merging with Symbol, Motorola deftly positioned itself as a trusted provider that can also provide devices for a future of mobile POS. They’re going to be selling a lot of payment terminals to major retailers, and now I’m sure they’ll be Google Wallet-ready.
But Google probably just wants to make its own phones.