Google-Motorola Deal: Is it good for the Android ecosystem?

The biggest news of this week has been the Google's acquisition of Motorola Mobility for $ 12.5 billion dollars.

The deal gives Google access to over 17,000 patents in Wi-Fi and mobility domain owned by Motorola. Irrespective of Android’s features, ease of use and millions of apps, it can be argued that the backing of the bigger players with money muscle and sharper marketing minds such as Samsung, HTC, LG, and Motorola etc. did help Android a lot in gaining widespread acceptance as an alternative to Apple’s much costlier iPhone devices. But by getting into bed with Motorola, Google has also sort of ditched the open handset alliance that it helped establish in 2007.

If Google has spent one-third of its cash pile on an acquisition, it would obviously be against its interests if Samsung, LGs and HTCs of the world continue to gain market share while Motorola mobility remains a marginal player in the global handset market.

By this logic, all these other players should now logically start investing in alternate platforms such as Windows Phone 7, or start supporting an alternate OS in market. An acquisition of increasingly beleaguered RIM and Nokia, who are finding it difficult to increase their handset market shares and revive their share stock prices, can definitely be a possibility by these other handset makers.

It is also increasingly clear that if Google had not made this acquisition, it would have faced lawsuits by major rivals such as Oracle, Microsoft, and Apple – all of which would have made Android unviable in the long run. However, by taking this huge gamble, it has now alienated its partners in this war of market share of consumer mobility devices and data.

In the past too, Google hasn’t had a great record of managing complex love-hate relationships with skeptical partners as seen in case of managing Cable companies (Google supported Sony and Samsung Smart TVs but still does not have any dedicated cable content deals), Music companies (all are suffering from online piracy woes) or even Publishing houses (Google being charged with free-riding on someone else’s efforts).

Google does not have a great record in managing customer service either, case in point - the original Google Nexus (with HTC) was a flop because there were no service centers, refunds took inordinate amount of time and lead to hassles since Google expected consumers to do everything online.

But in case of Android, Google was just being seen as a facilitator with a win-win ecosystem emerging involving Google, supporting handset makers and consumers, which lead to the phenomenal success of Android. However, this trinity may now be disturbed with the ally handset makers probably pulling out in one-two years time by switching to Windows Phone7 or owned proprietary OS platforms.

If Google starts following Apple’s strategy of integrating hardware and software, it would also mean that handset vendors other than Motorola would perhaps lose out on best innovations of Android. Google should now only wish that Motorola becomes a dominant player in next two years in global smartphone market. If not, it can soon be a game over for Android.