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Motorola gambles big on Linux, Sinocapitalism

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3GSM Inspired or insane, you'll have to decide, but Motorola yesterday vowed to make Linux the mainstay of its low and midrange phones.

This has much to do with its China strategy, the result of its pioneering forays in basing design and manufacturing on the continent, and using feedback from Asian markets with experiments such as the Accompli 008. Judging from the first example, the A835 smartphone, the results are already impressive, and Motorola could be the first to ride this wave that weds a disruptive technology (Linux) to a disruptive economic model (China's quite unique version of state-owned capitalism) all the way to prosperity.

Or it could, as we suggested at a press conference yesterday, simply walk away from this as it has with so many previous initiatives.

It took some goading to prod the executives into a passionate defense of the new Linux plus Java strategy.

Since Motorola had trumpeted past partnerships with Palm and Symbian only to walk away, why should we believe that it had sticking power this time?

Scott Durchslag, corporate VP of strategy and business development took up the gauntlet. After some non-too-convincing 'Well, why not?' noises from his superiors, Scott explained that Motorola saw Linux+Java as a disruptive technology for the following reasons:

"It's different to what we've done in the past," he told us, "It's all about a platform."

"We don't have to write all the code. There's also an advantage from the cost point of view - there's no licensing cost, so you can tap the codebases and you don't need to have teams of engineers."

That translates as - you don't need to have teams of Motorola (or Symbian) engineers doing the work, when you can have Linux coders doing it for free.

"The next great application won't come from some middle-aged guy in Helsinki," he said, pointedly.

And Scott didn't see the operating system as a great value proposition in itself:

"We do not believe the OS is strategic, it's what's higher up the stack that matters. What runs underneath that is interesting to some but to the consumer and the experience it's higher up the stack."

Ron Garriques, senior VP for phones in the EMEA region added that carriers have "next to zero" chance of customizing their phones. "Carriers are in charge," he said. (A theme we shall return to often this week, as it seems to be haunting the conference).

Scott pointed to the enthusiasm that the announcement had generated on Slashdot as vindication. This was, he told us offstage, the single biggest platform pledge for handheld Linux by any major manufacturer. And in this, he is probably correct. By walking away from Symbian and Nokia, Motorola is unlocking a Pandora's Box of competitive forces from which it might or might not be able to profit. That alone makes it one of the year's most intriguing moves, but is it one born of confidence and long-term commitment, or a desperate move to stem the success of Nokia's Symbian/Series 60 licensing strategy?

Recompile my phone, please - I've got a call coming in

First, a little context.

Strange things are happening in the mobile phone business, but underpinning all these moves is the question of whether manufacturing itself should be oriental or occidental. It's a power game in which Eastern manufacturers seek to gain more of the R&D expertise and therefore the design of these devices, or whether they should remain sweatshop assembly lines as they are in the PC business. Sweatshops for the likes of Dell, who employ Asian contract manufacturers simply because there aren't enough prisoners in the USA to provide cheap labor.

But phones are consumer devices, which Eastern manufacturers do very well indeed, and so the Panasonics and the erstwhile Chinese Sonys, quite justifiably, see no reason to kow-tow to today's Western industry leaders. Especially since in the phone business, unlike the PC business, they don't actually need the vaunted Microsoft or Intel brand or know-how to sell a device. As we saw yesterday, courtesy of Mr Yui Kaye Ho, who is general manager of Motorola's Smartphone products in Beijing, China has produced a tiny Linux/Java smartphone that does decent MP3 playback, excellent video and of course does PIM and phone too. Underestimate the brilliance of Chinese engineering at your peril.

The response of Western manufacturers - Nokia, Sun and others alike - has been to have it both ways. All pledge to a new 'low cost' model, which centres the R&D firmly in the West, while ruthlessly harvesting the Asian assembly lines as low-cost supply chains. They supplement this with licensing models, which allow competing manufacturers to share technology (Sun with Java, Nokia with Symbian/Series 60) and produce 'clones'. but this strategy is simply a more elaborate, more subtle form of ownership than the Wintel model: the real ownership, and therefore leadership, remains in Helsinki or Mountain View.

Motorola's gamble ought to be seen in this context. It's as much a response to Nokia's success in licensing Symbian/Series 60 as a heartfelt blow for open source freedom. Given Motorola's track record in deciding on a platform (PalmOS, Symbian OS) (Taligent, PowerPC - Ed) and sticking to it, some cynicism would be justified.

This move is also, we should point out, less than what it claims to be. The much vaunted "freedom" offered by basing a phone on a Linux OS is largely illusory. No carrier is going to recompile a kernel to differentiate its phone from another carriers simply because of Linux. Just because it can, that doesn't mean it will.

The "differentiation" Motorola talked about here today takes place on a cosmetic level or with the application and services set that the carrier chooses to bundle with the device. The consumer and the application developer has no more freedom than they had before. And remember, the real application APIs here are Java, not POSIX.

However, you can bet that brilliant Chinese technologists will take this offering and run with it. We hope they do, if only because it promises to add to our vocabulary immensely. We're used to describing the world in terms we already know - such as that ancient MBA staple of "horizontal" and "vertical" industries - proven by a business model we already "know" - the PC business. This is something entirely new. Anyone who patronizes the Chinese or otherwise underestimates the potential of China's state-owned capitalism to own an increasing share of its IP could be in for a nasty surprise.

(Beijing knows that the first and some of the most important Qualcomm patents expire in about six years. You can picture it counting down the days on the calendar).

Full marks to Moto for appreciating this. It's looking to the future, even if it might be looking into the future with both hands over its eyes. And who wouldn't? ®

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