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One of the most intriguing aspects of the deal between Google and Motorola Mobility is that it could actually enable Microsoft and RIM to emerge as the ultimate beneficiaries. The deal could help Microsoft by making the companys mobile OS more attractive to smartphone makers. RIM could benefit because it could convince investors that the company was more valuable than what the price of its shares indicated.
Google has managed to make its Android OS such a success in the smartphone space, by pretending that it was always happy to remain confined to the software business. Companies like HTC, Samsung and even Motorola have benefited tremendously by Googles willingness to license Android to anyone.
However, once Google enters the mobile hardware space, with its acquisition of Motorola Mobility Holdings, its Android partners will start wondering if the company is not about to start playing favourites. As a hardware player Google will be competing directly with other hardware players like Samsung, HTC, etc. that have till now been its partners. Any sign of rift between Google and its Android partners will give an opening to companies like Microsoft, which own rival platforms.
Google, on its part, will surely present a different set of arguments. But Microsoft undoubtedly smells an opportunity out here, and it will look for ways to turn mangoes into mango shake. Industry specialists are of the opinion that the deal could sour relations between Google and its partners, who have helped Google beat Nokia and Apple to win the biggest share of the mobile software market.
Perhaps Google had anticipated this kind of a reaction to its buyout of Motorola Mobility. That is the reason why Larry Page, one of the founders of Google who recently became the CEO, provided reassurance in a company blog post, saying that the acquisition would not change our commitment to run Android as an open platform. Larry has also added that Google would continue to run Motorola as a separate business. But in the fast paced and mercurial world of smartphones, such assurances often get taken with a pinch of salt.
If at some future date, Google starts seeing a business advantage in becoming a full-fledged mobile player, it will hardly allow the interests of its Android partners to hold it back. In any case, it is going to be quite difficult for Google to both license its products and compete with those licensees at the same time. Even Apple had tried to license its OS during the 1990s; the system did not work. Previously Google tried to enter the hardware market by selling its Nexus One phone through its website. But the Nexus One phones had lukewarm support from public.
RIM could also be a potential beneficiary of Googles deal. This is borne out of the fact that its beaten down scrip rose by as much as 10 percent on announcement of the deal. The rise in RIMs shares are mainly on account of the fact that some investors were of the opinion that the BlackBerrys maker could deserve a premium valuation similar to what Motorola Mobility had received from Google. Motorola Mobility received a generous 63 percent premium from Google. A similar premium to RIM could value the company at something over $20 billion.
There are persistent rumours of Microsoft being a possible suitor for RIM.
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