The Motorola buyout: Can Google reinvent itself as an Apple?

Google’s surprise announcement today that it is buying Motorola Mobility, which makes the Android-based Motorola Xoom tablet and several Android smartphones, suggests that the executives at Google have figured out they require more than a decent operating system to take on Apple. Google needs a complete ecosystem of hardware, software, and services to challenge the highly integrated and mutually supporting ecosystem elements that Apple has in its iPhone, iPad, Mac, iTunes, Apple TV, and related products.

When you buy an iPhone or an iPad, you get much more than a device; the same is not true of an Android tablet or smartphone. Of course, buying a hardware maker — especially one with a poor history in capturing customers’ imaginations and that has struggled for years to break its stodgy product approach — is no guarantee an ecosystem will follow. Apple designs all the pieces to work together from the get-go; it doesn’t graft on alien segments in hopes the composite creature will work.

Why Google’s Motorola Mobility buy makes sense, in theory But Google may have no choice. Sure, it dominates sales of smartphones, but if you look at who’s buying them, they’re the same people who used to buy regular smartphones — lots of volume, but little profit margin. Nokia justified its lack of smartphone progress by citing that “feature phone” market as its powerhouse of profit — until it evaporated in the last year. Google likely can see a similar trajectory occur if it didn’t shake up its business.

As you’d expect, industry analysts have warned the Motorola Mobility acquisition will scare off Samsung and HTC from the Android platform. Given that Samsung sells more smartphones than anyone but Apple, a shift by Samsung from Android to, say, Windows Phone 7, could gut the Android market. That’s possible, but companies like HTC and Samsung are like arms dealers: They buy from and sell to anyone. If they think there’s money to be made in Windows Phone 7, Bada (a Samsung “lite” smartphone OS sold outside the United States), or even DOS, they will have products using that technology. There is no loyalty, and Google likely understands these “friends” are only fair-weather allies. 

Google’s understanding that it needs a more consistent hardware experience is not new. It partnered with HTC to create its first Nexus One smartphone as a “reference model” design that it also sold. That device tanked, but Google persevered, working closely with Samsung on the Galaxy Tab 10.1, the first real iPad competitor on the market.

But those partnerships also showed the limit of depending on device makers who work with anyone and sell any technology they think they can make a buck on. HTC, Motorola Mobility, and Samsung have each come out with Android variations that cause developer headaches, introduce inconsistencies to the user experience, and generally fragment the market. After all, they all want their products to stand out from other Android devices.

However, their commitment (or perhaps ability) to doing so has been uneven. Thus, HTC came out strong with its Sense UI but lately has appeared to be just going through the motions. Motorola made a lot of noise last year about building a developer platform, and then again last winter about adding corporate security to Android; both seem to have fizzled.

Motorola’s own Android UI variant, Motoblur, has been widely criticized, although its Atrix device showed real innovative thinking earlier this year about “post-PC” product possibilities. Samsung recently has been the most active partner, with the Galaxy Tab tablet and Galaxy line of smartphones lighting up the charts; plus, it has been the most aggressive in supporting Google’s Chromebook intiative (Google’s weak attempt to create a competitor to Windows and Mac OS X).

So having a captive “partner” could get Google out of these up-and-down relationships. But perhaps the most immediate advantage to Google’s Motorola Mobility purchase is Motorola’s significant portfolio of mobile patents, which Global Equities Research analyst Trip Chowdhry has noted could really help Google overcome a significant weakness in the mobile patent wars that Apple recently shifted into a shock-and-awe campaign.

As Motorola Mobility continued to struggle this spring and summer with weaker-than-expected sales, you can see why Google decided to buy it out: to have a hardware arm it could control and use as the basis for a stronger Android ecosystem.

Getting an advantage from Motorola will not be easy But doing this is much harder than it sounds. Tech history is replete with similar acquisitions that went nowhere. Integrating established companies is never easy, as you have years and years of history, groupthink, and legacy to integrate.

Google and Motorola could not be more different. Google is the epitome of the freewheeling Silicon Valley company run by young people for whom work and play are one and the same, while business success is a side effect. Motorola Mobility is a stodgy, conservative, bureaucratic, tin-eared company that has lots of smart people but no endemic creative instinct.

I would love to be a fly on the wall as the Google Android and Motorola device teams begin working together! As Don DePalma, president of the consultancy Common Sense Advisory puts it, “This may end up being a bridge too far for Google.”

Beyond the cultural differences is the reality that you can’t just graft products together. They have to be designed to reinforce each other in natural ways that delight customers. What Motorola and Google each bring to the table don’t often fit, and “delight” seems rarely have to been a goal. Over time, they could evolve that way, but the strategy takes far too long in business, especially in the tech segment.

Google theoretically now has most of the pieces: an operating system that works on tablets, smartphones, and set-top devices, plus a hardware manufacturer that makes all three devices and has some experience with business customers (to help Google play equally well in individual and business settings, which only Apple iOS devices do today). Throw in Chrome OS as the post-PC extension and Google’s various cloud services as the application glue, and Motorola’s patent portfolio, and Google’s portfolio seems to have everything that Apple does, except for the media business — that is, iTunes.

The potential is there, and Google has the luxury of having an obscene amount of money to invest in the necessary transformation — it can’t be just integration — of its portfolio of device and supporting technologies. To date, Google has not shown the kind of leadership or attention span to succeed. After several years of work, the Chromebooks’ Chrome OS still hasn’t delivered what was promised (much less what is needed), and Google has let its smartphone version of Android languish as it focused on the tablet version — a dangerous letting-go that makes me question how many efforts Google can sustain simultaneously. Then there are all those “throw it against the wall” projects like Google Wave that Google has become infamous for.

By contrast, Apple’s been working on its ecosystem doggedly and with singular focus for more than a decade, and it has incredible financial reserves, plus the long-term industry contracts and — most important — the customer base whose passions are entrenched and tested. Oh, and an amazing leadership team that extends several levels beyond CEO Steve Jobs that has been pulling off a strong ecosystem for years.

Google may have the right idea. But the execution and the transformation are what will matter, not the idea. CEO Larry Page does seem determined to change Google’s culture to one of purposeful innovation, not college dorm experimentation, but that’s no mean feat. Still, I wish Google good luck. The industry needs a strong Apple competitor, though at this point I don’t see anyone who’s up to the job.

This article, “The Motorola buyout: Can Google reinvent itself as an Apple?,” was originally published at InfoWorld.com. Read more of Galen Gruman’s Mobile Edge blog and follow the latest developments in mobile technology at InfoWorld.com. Follow Galen’s mobile musings on Twitter at MobileGalen. For the latest business technology news, follow InfoWorld.com on Twitter.