tag:theconversation.com,2011:/es/topics/motorola-1236/articlesMotorola – The Conversation2016-01-13T09:41:27Ztag:theconversation.com,2011:article/339672016-01-13T09:41:27Z2016-01-13T09:41:27ZMotorola brought us the mobile phone, but ended up merged out of existence<figure><img src="https://images.theconversation.com/files/107896/original/image-20160112-6996-1jahuzf.JPG?ixlib=rb-1.1.0&rect=0%2C160%2C2560%2C1739&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Even inventive companies have their day.</span> <span class="attribution"><span class="source">OptoScalpel</span></span></figcaption></figure><p>If you own a mobile phone, chances are that it isn’t made by Motorola. But it was not always this way: Motorola was once the brand most associated with the mobile phone, and the firm whose products first popularised them. Now, a year after its <a href="http://www.cnet.com/uk/news/lenovo-closes-acquisition-of-motorola-mobility-from-google/">purchase by Lenovo</a>, the Chinese firm has announced <a href="http://www.theguardian.com/technology/2016/jan/08/motorola-brand-killed-off-lenovo">the brand will no longer exist</a>. So what went wrong for Motorola?</p>
<p>The mobile phone’s origins can be traced back to 1947 and a team of engineers lead by Douglas Ring working for Bell Labs in the US. All the basic principles and features we now associate with a mobile phone and cellular network were established by this team, but the technology of the day was simply incapable of realising their visionary concepts. It wasn’t until April 1973 that a team of Motorola engineers led by Martin Cooper created the world’s first functioning cellular mobile phone. And even then there wasn’t a network for it to use: the first experimental cellular network was built in Chicago four years later, and <a href="http://www.theregister.co.uk/2015/01/01/30_years_of_mobile/">didn’t reach the UK until 1985</a>. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/0WUF3yjgGf4?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>There were at the time two major companies designing and manufacturing mobile phones, Motorola and Nokia, but the more innovative of these two was most definitely Motorola. This is the firm that gave us the iconic <a href="http://www.retrowow.co.uk/retro_collectibles/80s/motorola_8000X.php">DynaTAC 8000</a> in 1984, the world’s first flip phone, the MicroTAC, in 1989, and in 1996 the world’s first clamshell-style phone, the StarTAC, also the smallest, lightest mobile of its day.</p>
<p>In 1991 Motorola released the world’s first GSM cellular handset (Motorola 3200). In 1993 it manufactured the world’s first mobile phone using the GSM 1800MHz band (Motorola m300), followed by the first tri-band mobile phone in 1999 (Motorola L7089). Together BT Cellnet and Motorola launched the world’s first GPRS mobile data service in 2000, using the Motorola Timeport T-260. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/107893/original/image-20160112-6986-1bm3a3s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/107893/original/image-20160112-6986-1bm3a3s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/107893/original/image-20160112-6986-1bm3a3s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=704&fit=crop&dpr=1 600w, https://images.theconversation.com/files/107893/original/image-20160112-6986-1bm3a3s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=704&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/107893/original/image-20160112-6986-1bm3a3s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=704&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/107893/original/image-20160112-6986-1bm3a3s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=884&fit=crop&dpr=1 754w, https://images.theconversation.com/files/107893/original/image-20160112-6986-1bm3a3s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=884&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/107893/original/image-20160112-6986-1bm3a3s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=884&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Motorola StarTAC, the smallest flip phone of its day.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:First_Generation_Motorola_StarTAC_cellular_phone.jpg">Nkp911m500</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>In fact, right from the beginning world firsts were what Motorola did. The company that would become Motorola began life in 1928 as Galvin Manufacturing Corporation, of Chicago. It quickly established itself as a specialist in radio technology, developing the first in-car radios – hence MOTOR (representing the car) and VictrOLA (representing sound, from the <a href="http://www.victor-victrola.com/History%20of%20the%20Victor%20Phonograph.htm">Victrola Talking Machine Company</a>).</p>
<p>The firm went on to create the first walkie-talkies for military use, the in-car radio-telephone, the world’s first pager, and we even heard Neil Armstrong’s immortal words when he stepped foot onto the lunar surface in 1969 thanks to Motorola radio technology. And this is in addition to the firm’s pioneering work on semiconductors, microprocessors (the <a href="http://www.cpu-world.com/CPUs/68000/">Motorola M68000 family</a> powered popular computers such as the Atari ST, Amiga and early Apple Macintoshes) televisions, and barcode scanners.</p>
<p>Motorola was the largest mobile phone manufacturer in the world before Nokia knocked them off their top spot in 1998. The firm had a brief resurgence in fortunes with 2004 launch of the Razr, the world’s top-selling clamshell mobile and one of the thinnest ever produced. But between 2006 and 2009, Motorola’s mobile market share plummeted from 21% to 6%. </p>
<h2>How did it all go wrong?</h2>
<p>Motorola’s problem was that it was a hardware technology company, but from the mid-2000s it was software driving the mobile phone business. Here Motorola was weak – their phone’s interface was seen as clunky compared to its rivals, and their smartphones dithered between Linux and Windows-based operating systems. Products such as the Motorola Q, a Blackberry-like smartphone with a QWERTY keyboard, fared poorly compared to the competition, while the arrival of the Apple iPhone in 2007 changed the game for everyone, as the mobile phone morphed into a pocket computer.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/107898/original/image-20160112-6986-1my64a2.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/107898/original/image-20160112-6986-1my64a2.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=451&fit=crop&dpr=1 600w, https://images.theconversation.com/files/107898/original/image-20160112-6986-1my64a2.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=451&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/107898/original/image-20160112-6986-1my64a2.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=451&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/107898/original/image-20160112-6986-1my64a2.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=567&fit=crop&dpr=1 754w, https://images.theconversation.com/files/107898/original/image-20160112-6986-1my64a2.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=567&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/107898/original/image-20160112-6986-1my64a2.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=567&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Gone, but not forgotten?</span>
<span class="attribution"><span class="source">Motorola Mobility</span></span>
</figcaption>
</figure>
<p>In 2009, under CEO Sanjay Jha, Motorola refocused on producing Android phones, launching its Droid phone range which was picked up by US telco Verizon. That Droid sales exceeded those of the iPhone in the US encouraged Google to take an interest in purchasing Motorola. And so in 2011, Motorola was split in two: Motorola Mobility, which focused on consumer devices including mobile handsets was <a href="http://bgr.com/2014/02/13/google-motorola-sale-interview-lenovo/">sold to Google for US$12.5 billion in May 2012</a>, leaving the rump as Motorola Solutions.</p>
<p>Motorola’s appeal to Google was as a manufacturing company to produce its own devices, the Nexus phones, and to gain access to Motorola’s patent catalogue. The Moto range of smartphones released under Google’s ownership were well received, with the entry level <a href="http://www.theguardian.com/technology/2014/apr/01/moto-g-boosts-motorola-mobile-smartphone-sales">Moto G garnering 6% of the UK market share in Feburary 2014</a>. The high-end Moto X fared much more poorly, and US manufacturing was closed and moved to China and Brazil.</p>
<p>Today Motorola Mobility has a 1% share of the global mobile phone market, but stronger in the US with around 6.8%. Nevertheless the continuing global market share decline and year-on-year financial losses saw Google sell the firm on once more, <a href="http://bgr.com/2014/02/13/google-motorola-sale-interview-lenovo/">to Lenovo for US$3 billion</a> in late 2014. For Lenovo it was a opportunity to gain foothold in the US market with an established brand.</p>
<p>So for while it seemed as though Motorola would live on – albeit a pale shadow of its former self – under Chinese ownership. Instead the company that gave us the mobile phone and so many world firsts has ended its days passed from pillar to post, sold and re-sold, until the iconic Motorola brand was finally merged out of existence. </p>
<p>And so Motorola joins a group of departed tech giants that ploughed a similar path: Atari, Commodore, SGI, Sun – how the mighty are fallen.</p><img src="https://counter.theconversation.com/content/33967/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nigel Linge has received funding from the EPSRC and European Commission.</span></em></p>Motorola brought to market many features of mobile phones we take for granted, but it wasn’t enough.Nigel Linge, Professor, Computer Networking and Telecommunications, University of SalfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/269492014-05-20T20:22:09Z2014-05-20T20:22:09ZApple, Google and Samsung … is it peacetime in the patent wars?<figure><img src="https://images.theconversation.com/files/48955/original/ggqj8kd9-1400560372.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">With not one but two truces on the table, does this spell the end of the patent wars?</span> <span class="attribution"><a class="source" href="http://www.flickr.com/photos/magill_photography/8605391437">[Magill]/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><p>Apple and Google <a href="http://www.theregister.co.uk/2014/05/17/its_over_apple_and_google_end_patent_war_over_motorola/">agreed</a> last week to abandon mutual litigation over smartphone software and hardware patents. Yesterday the <a href="http://koreatimes.co.kr/www/news/tech/2014/05/129_157454.html">Korea Times reported</a> that it appears likely Apple and Samsung will also reach a similar agreement soon. </p>
<p>These latest developments in the long-running disputes between the tech giants about patents are a reminder that we should look at the specific issues behind these deals.</p>
<p>So why would three of the biggest tech companies want to drop their multi-million dollar – and sometimes <a href="http://www.theverge.com/2014/3/31/5564134/round-two-apple-and-samsung-suit-up-for-another-billon-dollar-patent">billion dollar</a> – lawsuits? Let’s first get into the problems underlying patents themselves.</p>
<p>A <a href="http://www.ipaustralia.gov.au/get-the-right-ip/patents/">patent</a> gives the patent holder exclusive rights to commercially exploit a particular innovation. A key <a href="https://theconversation.com/ip-patents-copyright-you-5421">rationale</a> for that right is the encouragement of innovation. </p>
<p>It is assumed that individuals and organisations will invest their skill, time and money – often on a very large scale – to develop something new. That something might be a life-saving pharmaceutical, computer hardware, software, a <a href="http://web.mit.edu/invent/iow/rohwedder.html">bread slicer</a> or the <a href="http://inventors.about.com/od/weirdmuseums/ig/Inventive-Thinking/Hula-Hoop-Toy.htm">hula hoop</a>. </p>
<p>It’s no surprise then that patents often involve litigation. The patent holder litigates against an entity, such as a competing business, that has allegedly infringed its exclusive rights. That litigation may involve millions or hundreds of millions of dollars in court costs (patent law involves expertise and doesn’t come cheap) and result in billions of dollars of damages. </p>
<h2>Patent war … what is it good for?</h2>
<p>Patent holders may face litigation from competitors who assert that the patent is invalid, perhaps because the officials who allowed registration of the patent were asleep on the job. We’re seeing criticism, for example, of <a href="http://www.dailymail.co.uk/sciencetech/article-2624338/Want-photo-white-background-Beware-Amazon-owns-patent-process.html">Amazon’s patent</a> for taking photos against a white background, arguably a joke on the part of CEO <a href="http://www.theguardian.com/technology/shortcuts/2013/nov/06/jeff-bezos-biography-five-things-amazon-founder">Jeff Bezos</a>.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/48951/original/dpgshhp6-1400559835.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/48951/original/dpgshhp6-1400559835.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=478&fit=crop&dpr=1 600w, https://images.theconversation.com/files/48951/original/dpgshhp6-1400559835.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=478&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/48951/original/dpgshhp6-1400559835.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=478&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/48951/original/dpgshhp6-1400559835.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=601&fit=crop&dpr=1 754w, https://images.theconversation.com/files/48951/original/dpgshhp6-1400559835.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=601&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/48951/original/dpgshhp6-1400559835.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=601&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://www.flickr.com/photos/nickwheeleroz/2220007293">Nick Wheeler/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<p>Apple, like Microsoft, has been famously litigious in defending and contesting patents. That’s unremarkable business practice, an echo of the disputes from the 1890s to 1920s in the <a href="http://wsupress.wayne.edu/books/detail/monopoly-wheels">car industry</a> and the 1880s through 1930s in the chemicals industry. </p>
<p>It’s a matter of CEO ego and competitive advantage, not war to the death. Competitors sometimes decide to stop feeding the lawyers and come to an agreement. Such an agreement might involve sharing of patents (cross-licencing), a sharing that potentially raises concerns regarding anti-competitive activity.</p>
<h2>Apple v everyone, it seems</h2>
<p>Apple has numerous patents regarding smartphones and devices such as iPads.</p>
<p>Motorola, at one stage a dominant mobile phone company, also had a swag of patents. It <a href="http://en.wikipedia.org/wiki/Motorola_Mobility_v._Apple_Inc.">sued Apple</a>, alleging infringement of its patents and demanding billions in compensation. </p>
<p>Apple counter-sued, alleging infringement by Motorola. Things got complicated when Google <a href="http://www.google.com/press/motorola/">acquired</a> Motorola’s mobile phone arm for US$12.5 billion. </p>
<p>Google wanted Motorola’s patents; it <a href="http://news.lenovo.com/article_display.cfm?article_id=1768">offloaded</a> Motorola’s mobile phone manufacturing to Lenovo for U$2.9 billion. In the global information economy there’s more money in owning knowledge than in owning machines, an insight increasingly recognised by business schools. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/48954/original/qk34t64m-1400560012.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/48954/original/qk34t64m-1400560012.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/48954/original/qk34t64m-1400560012.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/48954/original/qk34t64m-1400560012.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/48954/original/qk34t64m-1400560012.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/48954/original/qk34t64m-1400560012.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=505&fit=crop&dpr=1 754w, https://images.theconversation.com/files/48954/original/qk34t64m-1400560012.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=505&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/48954/original/qk34t64m-1400560012.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=505&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://www.flickr.com/photos/jesusbelzunce/4366759251/">Jesús Belzunce Gómez/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Apple and Samsung have concurrently been suing each other over patents, again relating to the software and hardware that makes smartphones and <a href="https://theconversation.com/samsung-galaxy-tab-an-early-christmas-present-for-consumers-but-still-not-crunch-time-for-apple-4543">other devices</a> so “smart” or usable.</p>
<p>There’s been litigation in <a href="https://theconversation.com/patent-wars-on-the-pacific-rim-starring-apple-and-samsung-16951">Australian courts</a> – closely watched by lawyers, regulators and businesses in our regions, given that we serve as a sort of legal test market. </p>
<p>There has been similar litigation in Germany, the US and other jurisdictions. A US jury <a href="http://touch.latimes.com/#section/-1/article/p2p-80120284/">recently awarded</a> Apple US$119m in damages for Samsung’s infringement of a mere three software patents. And not only do the courts patiently sort things out – they must deal with <a href="http://www.bbc.com/news/technology-19381096">appeals</a> when one litigant isn’t happy with the decision. </p>
<h2>But wait – there’s more</h2>
<p>Intellectual property licensing company <a href="http://www.ip-rockstar.com/">Rockstar</a> is owned by Apple, Ericsson, Microsoft, RIM and Sony and holds patents acquired from Nortel. It’s meanwhile busily <a href="http://www.pcworld.com/article/2156180/samsung-rockstar-patent-dispute-to-continue-in-texas-court.html">suing Google</a> and phone manufacturers over Android patents.</p>
<p>Just as in the past, patents are read as <a href="http://www.cambridge.org/gb/academic/subjects/law/intellectual-property/global-governance-knowledge-patent-offices-and-their-clients">bases</a> of national power and competitiveness. It is unsurprising that governments have started to get involved in the smartphone disputes. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/0JArP-2nL2E?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Obama’s effect on the Apple/Samsung patent war.</span></figcaption>
</figure>
<p>The US for example has expressed unhappiness with South Korea, home of Samsung, and Taiwan. That pro-patent sabre rattling is directed at both those governments and at China, a jurisdiction that has excellent law on paper but very problematical implementation. </p>
<p>South Korea and Taiwan in return have <a href="http://appleinsider.com/articles/13/08/05/south-korean-government-expresses-concern-over-obamas-veto-in-apple-samsung-patent-dispute">complained</a> about bullying. </p>
<h2>Close to home</h2>
<p>What does this mean for Australian small business and government? </p>
<p>One conclusion is that patent litigation is a fact of life (indeed, if you are a patent lawyer, it is a lucrative way of life). Australian start-ups need to know their way around the patent jungle and to have the skill (and resources) if they come into conflict with a giant such as Apple and Microsoft. </p>
<p>Last week’s <a href="https://theconversation.com/topics/federal-budget-2014">federal budget</a> ignored meaningful <a href="http://blog.patentology.com.au/2014/05/government-eviscerates-australian.html">support for innovation</a> through support for Australian inventors (contrary to the idealists of the <a href="https://theconversation.com/topics/commission-of-audit">Audit Review</a>, we don’t live in in an ideal market and innovation capital pool is shallow).</p>
<p>More subtly, the dog-eat-dog approach to university funding weakens the law teaching that is an under-recognised foundation for successfully getting Australian innovators into global markets. </p>
<p>If we’re thinking about smartphones and smart business, we need to think harder.</p><img src="https://counter.theconversation.com/content/26949/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bruce Baer Arnold does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Apple and Google agreed last week to abandon mutual litigation over smartphone software and hardware patents. Yesterday the Korea Times reported that it appears likely Apple and Samsung will also reach…Bruce Baer Arnold, Assistant Professor, School of Law, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/226142014-01-31T00:06:47Z2014-01-31T00:06:47ZEveryone wins in Motorola sell off, except HTC and Blackberry<figure><img src="https://images.theconversation.com/files/40226/original/swjddp9p-1391102203.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Once-mighty Motorola will be part of Lenovo.</span> <span class="attribution"><span class="source">Titanas</span></span></figcaption></figure><p>Google’s decision to <a href="http://googleblog.blogspot.co.uk/2014/01/lenovo-to-acquire-motorola-mobility.html">sell Motorola</a> to Lenovo could easily be misread as a sign of defeat. In fact, it is win-win. And it spells trouble for struggling competitors Blackberry and HTC.</p>
<p>Google originally bought Motorola in 2012 for about $12.5 billion and is now selling for $2.9 billion. The apparent shortfall is less severe when you consider the fact that Motorola came with $2 billion in cash (roughly the size of the operating losses incurred since), a <a href="http://moto.arrisi.com/special/learn_more/arris.asp">set-top box</a> business which Google sold off the same year for $2.35 billion, and roughly 17,000 patents which will mostly remain with Google.</p>
<p>At the time of the original purchase, there was much talk of Google combining its software with Motorola hardware to create an <a href="https://theconversation.com/innovative-apple-should-watch-out-for-app-disruption-18070">unassailable ecosystem</a>. But that was arguably never at the forefront of the internet company’s thinking when it bought the former American technology icon. </p>
<p>Pre-existing relationships with phone makers using Android would have soured if Motorola had become a privileged conduit for the operating system. The danger of such conflicts of interest is demonstrated by Microsoft’s involvement with Nokia, which <a href="https://theconversation.com/in-an-escalation-of-commitment-nokia-becomes-microsoft-17803">hurt the prospects</a> of Windows Phone becoming a universal smartphone operating system.</p>
<h2>Google frees itself of baggage</h2>
<p>Google was primarily interested in Motorola’s patent trove. The intellectual property is useful in the proxy-court battles with Apple. Back in 2012, Motorola’s patents were not on sale without the hardware business, so Google took the whole lot. </p>
<p>Just before that acquisition, Google had lost out in a bid for the patent portfolio of Canada’s ailing Nortel. A consortium that includes Apple acquired those patents and used them to <a href="http://arstechnica.com/tech-policy/2013/10/patent-war-goes-nuclear-microsoft-apple-owned-rockstar-sues-google">sue Google</a>.</p>
<p>Mindful of such threats, Google not only acquired Motorola but also recently agreed to <a href="http://global.samsungtomorrow.com/?p=33461">cross-licence</a> patents with Samsung, further bolstering its defences. The combined war chest of patents is to defend the Android ecosystem, rather than protect any advantage in hardware that Motorola had already lost. So Google won’t mind ridding itself of the actual hardware operations. </p>
<h2>Lenovo gains hardware scale</h2>
<p>The smartphone market is maturing rapidly, with <a href="http://www.ft.com/cms/s/0/2d355b82-883e-11e3-a926-00144feab7de.html">Apple</a> and <a href="http://www.ft.com/cms/s/0/d3df1004-87d0-11e3-9c5c-00144feab7de.html">Samsung</a> both failing to attain anticipated profits. It is becoming harder and harder for manufacturers to justify price premiums when smartphones look increasingly alike. </p>
<p>With such commoditisation, economies of scale grow in importance. Lenovo recently overtook LG to become the world’s <a href="http://www.idc.com/getdoc.jsp?containerId=prUS24645514">fourth-largest</a> smartphone maker by shipments. Motorola will add to its scale, particularly in the US market.</p>
<p>Lenovo, battle-hardened in the cost-conscious Chinese consumer market, is arguably better placed than Google to make the economics of maturing markets work in its favour. The company successfully built on IBM’s former Thinkpad brand when that market matured. It has also recently announced a takeover of IBM’s lower-end server business.</p>
<p>By contrast, Google thrives more in nascent markets, moving at the cusp of the technology frontier. In addition to the patents, the company is also holding on to Motorola’s Advanced Technology group – a kind of <a href="http://techcrunch.com/2014/01/29/google-keeps-motorolas-advanced-technology-group-home-of-the-modular-phone-and-password-tattoo">Q-division</a> whizz-kid team.</p>
<p>This team’s recent innovations include novel voice controls and clever <a href="http://motorola-blog.blogspot.co.uk/2013/10/goodbye-sticky-hello-ara.html">hardware modularisation</a>. The brainpower will no doubt be of use as Google intensifies its presence in wearable devices and the <a href="https://theconversation.com/googles-smart-home-strategy-starts-with-smoke-alarms-22096">smart home market</a>.</p>
<h2>Smaller contenders threatened</h2>
<p>Two companies, however, will be upset about the Motorola deal. Blackberry, a former pioneer of the smartphone era, has the dubious fortune of counting <a href="http://blogs.wsj.com/washwire/2013/12/04/president-obama-sticks-with-blackberry-for-security-reasons">Barack Obama as a customer</a>. Lenovo was interested in Blackberry, but the <a href="http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/lenovo-considered-a-bid-for-blackberry-but-ottawa-wouldnt-accept-chinese-takeover/article15256976/?cmpid=rss1&click=dlvr.it">Canadian government</a> considered the possible takeover a threat to national security and its neighbour’s president.</p>
<p>So Blackberry now has to make do without outside rescue. It has <a href="http://theconversation.com/blackberry-fail-shows-perpetual-dilemma-of-tech-innovators-19846">belatedly pivoted</a> towards providing mobile device-agnostic security services while outsourcing hardware to <a href="http://www.bbc.co.uk/news/business-25461892">Foxconn</a>.</p>
<p>The other disappointed onlooker is HTC. It is neither perceived as a high-end brand nor is it big enough to compete effectively in the mass market. It might end up in the arms of <a href="http://www.ft.com/cms/s/0/8751175e-35ab-11e3-b539-00144feab7de.html">Amazon</a> or attract interest from other Asian challengers such as Huawei or Coolpad.</p>
<p>Smartphone hardware is about to become as normal and boring a market as any other, where scale creates margins. Google’s strengths lie elsewhere.</p><img src="https://counter.theconversation.com/content/22614/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ronald Klingebiel researches and advises companies in the telecommunications industries. His work attracts support from both corporate and government funding sources.</span></em></p>Google’s decision to sell Motorola to Lenovo could easily be misread as a sign of defeat. In fact, it is win-win. And it spells trouble for struggling competitors Blackberry and HTC. Google originally…Ronald Klingebiel, Assistant Professor of Strategy, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/28792011-08-16T03:07:49Z2011-08-16T03:07:49ZGoogle buys Motorola Mobility to bruise Apple? Must be the patent wars<figure><img src="https://images.theconversation.com/files/2946/original/File_Malus-Boskoop_organic.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The proposed buyout of Motorola Mobile is Google's largest acquisition.</span> </figcaption></figure><p>Google surprised the entire tech industry last night <a href="http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html">by announcing</a> it is acquiring <a href="http://www.motorola.com/Consumers/AU-EN/Home">Motorola Mobility</a>, the maker of <a href="http://www.motorola.com/Support/US-EN/Consumer-Support/Mobile-Phones/Droid+-+USA_Default+US_Loc%253AUS-EN">Droid smartphones</a> and <a href="http://www.motorola.com/staticfiles/Consumers/xoom-android-tablet/us-en/overview.html">Xoom tablets</a>, for US$12.5 billion in cash.</p>
<p>This move, the largest acquisition to date by Google, is significant for many reasons. </p>
<p>First, by spending a significant portion of its US$39 billion war-chest, Google has sent an unambiguous signal about the importance it places on mobile devices. </p>
<p>Google, it would seem, has every intention of remaining a major player in the mobile space.</p>
<p>The move to buy Motorola Mobility gives Google greater access to the development of Android-compatible handsets, in addition to its existing software-development capabilities.</p>
<p>But more importantly, this deal gives Google a major boost in <a href="http://mashable.com/2011/08/03/google-vents-about-patents/">its patent battles</a> with Apple and Microsoft. </p>
<p>Motorola, founded in 1928, is one of the oldest telecommunication companies in the world and its handset division pioneered some of the earliest mobile phones.</p>
<p>Its <a href="http://www.youtube.com/watch?v=Qt84wnklfHE">StarTAC</a>, and then <a href="http://www.youtube.com/watch?v=3XPcEA3KKTk">RAZR phones</a> ruled the market for a while <a href="http://en.wikipedia.org/wiki/List_of_best-selling_mobile_phones">before losing significant market share</a> to more nimble competitors such as Nokia and Samsung.</p>
<p>A disastrous short-lived <a href="http://www.apple.com/pr/library/2005/09/07Apple-Motorola-Cingular-Launch-Worlds-First-Mobile-Phone-with-iTunes.html">tie-up with Apple</a> in 2005 did not help either, particularly when the latter went on to <a href="http://www.youtube.com/watch?v=4acWkNihaxc">unveil the iPhone</a> in 2007, poaching several Motorola executives in the process. </p>
<p><a href="http://www.zdnet.com/blog/btl/motorola-to-split-into-two-independent-companies-in-2011/30721">Motorola split in 2010</a>, announcing that the handset division would trade as a new entity called Motorola Mobility in 2011. </p>
<p>Motorola saw its salvation in <a href="http://www.android.com/">Google’s Android smartphone platform</a> and went all in, moving completely away from its own proprietary system.</p>
<p>It was one of the founding members of the <a href="http://www.openhandsetalliance.com/">Open Handset Alliance (OHA)</a>, championed by Google in 2007 to provide direction to the development of Google’s Android mobile operating system. </p>
<p>Yet, despite its well-received Xoom and Droid devices, Motorola made <a href="http://www.sec.gov/Archives/edgar/data/1495569/000119312511040013/d10k.htm">a net loss of US$79 million in 2010</a>.</p>
<p>With Android, Google seemed to have been following the well-trodden path created by Microsoft for Windows, developing the operating system to be adopted by a number of hardware partners. However, it was evident that the same strategy was not working well. </p>
<p>Handsets with different capabilities and configurations supporting different versions of the operating system caused the Android ecosystem to be fragmented. </p>
<p>Device manufacturers tried to differentiate by providing custom interfaces on top of Android, thereby fracturing its identity. </p>
<p>The patent lawsuits did not help either. In fact, everyone in the mobile space <a href="http://news.designlanguage.com/post/1252039209">seemed to be suing everybody else</a>.</p>
<p>Manufacturers adopting Android seemed to be at the receiving end the most lawsuits, with HTC having to settle with Microsoft, and <a href="http://apcmag.com/europe-falls-to-apple-galaxy-tab-101-now-banned-there-as-well.htm">Apple winning an injunction</a> against Samsung’s Android-based Galaxy tablets in Europe recently.</p>
<p>Google’s Chief Legal Officer, <a href="http://www.google.com/about/corporate/company/execs.html#david">David Drummond</a>, recently started an argument <a href="http://googleblog.blogspot.com/2011/08/when-patents-attack-android.html">when he accused</a> other technology companies of waging a “hostile, organised campaign”.</p>
<p>As reported recently on The Conversation, Australia hasn’t been able to escape the patent wars, becoming the battleground for <a href="http://theconversation.com/samsung-galaxy-tab-vs-apple-ipad-the-tablet-patent-wars-hit-australia-2660">a stoush between Samsung and Apple</a>. </p>
<p>Further deterioration of this situation would push up the cost of manufacturing Android phones and drive the manufacturers toward Microsoft.</p>
<p>It was, therefore, imperative for Google to make such a decisive move.</p>
<p>With its purchase of Motorola Mobility, Google has gained ownership of around 14,600 granted patents central to technologies used in wireless communications.</p>
<p>With such an extensive patent portfolio, Google has not only shored up defenses for its partners in the OHA but has also gained the clout to force a truce in the ongoing mobile patent wars through cross-licensing agreements. </p>
<p>Specifically, Google might now wield enough power to propose an intellectual property share with Apple and others, potentially keeping the companies from suing one another.</p>
<p>The clear winner in this aquisition is Motorola Mobility which will still trade as a separate entity under Google. </p>
<p>While <a href="http://techcrunch.com/2011/08/15/live-blog-the-googlemotorola-acquisition-conference-call/">Google has assured other partners</a> that “Android is still open”, Motorola may end up as a preferred partner, particularly for developing <a href="http://www.google.com/phone/detail/nexus-s">Google’s line of Nexus phones</a>. </p>
<p>Apple and Microsoft might also start to consider the cost of running lawsuits against opponents backed by a formidable patent portfolio. </p>
<p>For consumers, such a cessation of patent hostilities would be welcome news, ensuring mobile device manufacturers focus on introducing innovative gadgets rather than suing each other out of existence. </p>
<p>Ultimately, that may be the best outcome of all.</p><img src="https://counter.theconversation.com/content/2879/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Srikumar Venugopal does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Google surprised the entire tech industry last night by announcing it is acquiring Motorola Mobility, the maker of Droid smartphones and Xoom tablets, for US$12.5 billion in cash. This move, the largest…Srikumar Venugopal, PhD; Lecturer in Computer Science and Engineering, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.