Google's Moto move spells iPhone doom
And it's Apple's own fault
Open...and Shut Mergers and acquisitions used to be how a company bought revenue, customers, or cool technology. In the mobile world, it's increasingly a way to buy defensive patents.
This was clear in Google's $12.5bn acquisition of Motorola Mobility, and it will unfortunately fuel many of the strategies Apple, Google, and others employ to kill competition.
As much as we worried about overpriced engineers, perhaps there will now be a run on overpriced attorneys.
Apple, the company that prides itself on building beautiful things, is partly to blame. They've now built a beautiful patent mess, one that may have been merely designed to stop Android, but which but mostly just makes mobile computing an unpleasant business in which to compete.
However much some observers may want to explain away Android's success by claiming that its tablet momentum is a mere matter of shipments and not real adoption, the reality is a bit different. Or, rather, it soon will be.
By some estimates, Google now activates 650,000 Android devices each day. That's pretty incredible.
Android's adoption curve is enviable (source: Asymco)
Those that rightly point out that Apple still dominates mobile profits completely miss the point. Actually, several.
First, Google doesn't make money directly from Android, and it really doesn't matter to Google how profitable its OEMs happen to be. The more smartphones and tablets there are on the market, the more money Google makes from advertising and other indirect revenue sources. In fact, while Apple is the single largest recipient of mobile-advertising money among the smartphone manufactures, as a group Android OEMs dominate the category.
Second, it's critical to remember who buys Android devices versus iOS devices: kids buy Android ("It's cheap!") while adults largely buy iOS ("Pricey, but it makes me cool with the other soccer dads!"). Guess which group will be buying devices long into the future?
Android owns the future global mobile buyer.
But not yet, of course, the current tablet buyer. That's still an Apple iPad market, as The Wall Street Journal reports, and for good reason. Apple basically created the market and has the best product at a price that remains very competitive with its would-be competition.
For now. After all, what are the tablet vendors doing now that they have inventories of high-end tablets sitting on the shelf? They're discounting them.
Guess what? I'm betting that discounts will move competing Android tablets, just as they have moved Android smartphones. Android hasn't won because it's better. It has won because it's cheaper. Will an influx of significantly cheaper Android-based tablets win market share from Apple's iPad? Almost certainly.
Dirty, rotten, silly scoundrels
Which brings us back to patents, the last refuge of scoundrels and mobile competitors.
Apple has been patenting anything and everything related to tablets, and is now trying to block Android tablets from ever seeing the market. Apple's Steve Jobs can declare victory all he wants at Apple love-ins, but the reality is that Apple has serious cause for alarm: cheap Android is going to eat its high-end lunch in tablets just as in smartphones, unless it can litigate away the threat.
With Google's acquisition of Motorola Mobility, Apple's trigger-happy patent strategy took a knock – 17,000 of them to be exact, which is the patent pile that Motorola Mobility amassed over the years, with 7,500 more applied for but not yet granted. Microsoft, which had hoped to sue its way into mobile relevance, also has to come up with a Plan B.
Small wonder, then, that Google CEO Larry Page called out patents in defense of the acquisition. Yes, Google still needs to figure out how this will affect its hardware partners such as HTC and Samsung, as Forrester and others have pointed out, but I doubt Google intends to hold onto the hardware business for long.
No, this deal wasn't about building an integrated, Apple-like experience for Android-based tablet and smartphone users. It was about stopping the Apple-like patent madness that is the only real threat to Android's mobile dominance, and that could have cost Google $2 billion each year.
Apple builds great products. There's a reason I'm typing this on a MacBook Air and researched this article using my iPad and iPhone. But as Apple faces an onslaught of cheaper, faster Android tablets and smartphones, with more developers poised to jump on the Android tablet bandwagon, Apple has a serious fight on its hands.
And not one that can be won with attorneys anymore.
Thankfully not. According to MDB Capital Group, Research in Motion has applied for or received 3,314 mobile-related patents, Nokia has 2,655, and Microsoft has 2,594. It's ridiculous to think that all of those patents cover very different aspects of mobile computing. Throw in Apple's and Motorola Mobility's thousands of patents, and the silliness becomes even sillier.
These patents almost certainly overlap to a great degree, and many of them are worthless to begin with. The sooner we get back to competing on product quality, innovation, and price, the better. ®
Matt Asay is senior vice president of business development at Strobe, a startup that offers an open source framework for building mobile apps. He was formerly chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfresco's general manager for the Americas and vice president of business development, and he helped put Novell on its open source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears twice a week on The Register.
The sooner we get back to competing on product quality, innovation, and price, the better
Amen to that brother, but I'm not holding my breath.
Don't have a problem
Since both are opinion pieces not News I have no problem. Having differing views is what makes life interesting.
There is a reason Android tablets are rubbish
Because they are running on software designed for phones, ice cream sandwich should be a giant leap forward in Android tablets.
I also don't buy that Android got popular because of price, almost everyone I know has moved to Android from Apple. Not one moved because of price, in fact in a lot of cases it wasn't actually cheaper, high end Android phones are often MORE expensive.
Things like Flash, background apps, more carriers, freedom to install what you like, customisability are what is selling Android phones.
I don't buy it
Despite the two competing and contradictory opinion pieces on El Reg today — claiming variously that Apple is finished or that Google wasted their money on irrelevant IP from a loss-making phone manufacturer — I think this is largely a sideshow.
The iPod showed that Apple can hold a direct-to-consumer market against a thousand competitors even when they organise under a common banner. They managed to create an aura of quality while being sufficiently competitive on price.
I think they're having a much harder time in mobile because selling to the consumer through networks is a lot more difficult when they don't want to give the networks any control. In that environment it's not surprising that manufacturers who are more willing to balance consumer experience against network demands have been able to sell in a lot more volume. Those volumes also become a benefit for all Android users, creating more interest in the top tier, unencumbered handsets.
That said, while the article is right that it's disingenuous to say that Apple are really winning the war with Android because they suck up so much of the profit in the handset arena, the fact that Google and others are also reaping significant funds doesn't seem to put Apple in a precarious position from where I'm sitting. Two segmented areas of profit are even less of a zero-sum game than most of the markets that the tech press likes to report as such.
I have to admit to still being uncertain exactly why Google have bought Motorola, given their unwillingness to get engaged in legal proceedings against their licensees to date, but I seriously doubt this spells doom for the iPhone. My expectation remains the same: that Apple will end up in more of a Mac situation than an iPod situation, profitably reaping a high-value niche.
Android is not cheap.
Android (on a comparable handset) is not cheap - a Samsung Galaxy IIS or something near-equivalent to an iPhone 4 is just under £500 SIM free - i.e. basically the same as an iPhone 4.
Sure there are cheaper Android handets but some of the 'really cheap' Android handsets are dreadful and can in-no-way be compared to an iPhone 4.