This week has been pretty crazy in big tech news. Monday morning started off with the early announcement by Google that it was going to acquire Motorola Mobility. On Thursday afternoon HP announced it was discontinuing their WebOS hardware for the time being and getting out of the PC market.
Google to Buy Motorola Mobility
This was personally shocking to me, and probably to most as well. Google, a software company, was buying a hardware company! The motivations behind this move are not completely revealed. On the investor conference call Monday morning, Google was not shy about talking up the patent portfolio of Motorola Mobility but would not comment on their entire strategy. They said they would keep Motorola running as a separate company, even having them compete with other OEM’s in their Nexus phone program. So that would mean Google wanted the patents to protect Android, and would just get Motorola Mobility as a side business. Seems cheery and the best defensive stand for Android.
There has also been talk about Google buying Motorola and their patents to protect Android from partners suing each other. Motorola was threatening to sue other manufacturers of Android devices, such as HTC and Samsung. This would be disastrous for Android as a complete system. This would also point out problems with the open source nature of Android where the manufacturers carry more of the patent burden than Google. This is in contrast where Microsoft licenses Windows Phone 7 at a price because it has the patents to back it up. (Apple doesn’t license their software to other companies, but has plenty of their own patents).
So what now for Google and Motorola? I wouldn’t mind a sweet Google TV box with their Motorola set-top box business. Or how about more plain Android devices instead of skinned phones everywhere? (Is it that difficult to ask for a pure Google experience on Verizon?) Google could also be aggressive with the patent portfolio and begin suing the likes of Apple and Microsoft instead of maintaining a purely defensive strategy, but I don’t see that being a popular option.
The HP Bombshell
Thursday afternoon I started seeing alerts about HP spinning off its PC business. Then a little bit later it was revealed they would be discontinuing their WebOS hardware. Nothing really shocking there. The TouchPad wasn’t selling well, nor were the WebOS phones. The only shocking thing was that this came a little bit over a year after HP bought Palm for over a billion dollars in July 2010.
The real bombshell in my opinion was the fact that HP was getting out of the PC market. The number one PC manufacturer was throwing in the towel saying the tablet effect on PC sales is real. Instead, HP will be focusing on the enterprise and business side of things. This is more profitable for the company and they are trying to drive more value for the shareholders. They also announced a purchase of a British software services company to move more in to the higher profit margin services market.
Google buying a hardware manufacturer for patents, and maybe more. HP moves out of the consumer space and more into enterprise and software services. I don’t know many who would have guessed that for this week in August. I’m sure things will calm down a bit, at least until next month. Until then, try to digest the magnitudes of these two announcements.