Motorola has survived crises and technological change, but it has
never grappled with something like this: a murky future governed by
Google, a powerful master with unclear intentions.
Hundreds of framed patents hang on two separate walls at the
headquarters of Motorola Mobility in Libertyville, Illinois. They
testify to the pride in innovation at Motorola, a luminary of
American business that has survived corporate crises and enormous
technological change.
But the company has never grappled with something like this: a
murky future governed by Google, a powerful master with unclear
intentions.
In announcing its plan last week to purchase Motorola Mobility
for $12.5 billion, Google emphasized its interest in the company's
rich trove of 17,000 patents. That portfolio would allow Google to
defend itself against competitors like Apple and Microsoft in the
legal arena, where billions of dollars in patent licensing fees can
be indirectly negotiated through lawsuits and countersuits.
But while industry analysts and insiders say the rationale makes
sense, they also say it leaves Motorola in an unusual position. Many
acquisitions are aimed at creating some well-articulated synergy
between the two companies, but Motorola's future role in this union -
- beyond patent warehouse -- is unclear.
Heightening the uncertainty is that the companies involved, both
of which declined to comment, are in some ways as different as two
technology companies can be. Google makes Internet services and
software, thrives on high profit margins and distributes its product
using giant data centers. Motorola makes hardware, has modest
margins on a good day and moves its products on trucks and airplanes
and through brick-and-mortar stores.
Some hope the cultures will fuse and lead Motorola to a future as
storied as its past. Martin Cooper, 82, who worked at Motorola for
30 years and developed the first hand-held cellphones there, said he
hoped great things would come of combining Google's momentum and
confidence with Motorola's tradition of excellence in radio
technology.
"The combination might make Motorola successful -- again," said
Mr. Cooper, whose patent from the early 1970s for cellular phone
technology is among those that hang at the company's entrance.
At the least, industry analysts said, Motorola almost certainly
would become a laboratory for Google to seek to perfect Android, its
mobile phone software, in concert with newly acquired hardware
engineers. Others say Google might wind up giving financial backing
to Motorola to help it revive its flagging fortunes.
But if it appears to be getting too cozy with Motorola, Google
risks upsetting other phone makers like HTC and Samsung, who build
some of the most popular smartphones and tablets running on Android.
"How do you compete with your partners and also work with them?"
said Ben Schachter, an analyst with Macquarie Capital, who called
the situation a "head scratcher."
Google has said it will allow Motorola to run independently. But
some analysts and investors say Google could pare back or sell big
parts of Motorola that create conflicts with partners or are not
central to its goals. And that makes for uncertain times for the
19,000 employees at Motorola Mobility in Libertyville, a northern
suburb of Chicago, and around the world.
