With partners like Google, who needs competitors?
Top smartphone- and tablet-makers — like Samsung and HTC — are showing a happy face since their software ally Google bought their rival Motorola Mobility, but the positive pronouncements mask a certain uneasiness.
With Google diving into manufacturing, the Android operating-system partners are considering their futures in software.
Last week, Samsung Chairman Lee Kun-hee ordered his team to boost the company’s software prowess, possibly through a merger or acquisition, according to South Korean reports.
HTC CEO Peter Chou reiterated this week his company’s commitment to Android, and downplayed talk that the company would develop its own OS.
Samsung, HTC and Motorola have been the most aggressive adopters of the Android platform, propelling it to the No. 1 operating system on US smartphones.
Google’s bid to buy Motorola’s mobile arm, which still needs federal approval, also threw new doubt on how open Android operating system will remain.
The search giant was most interested in Motorola for its robust patent portfolio, which helps the whole Android ecosystem by providing some cover against lawsuits from others including Apple, that have threatened Samsung and HTC
Google has tried to assure its partners — and regulators — that it will continue to operate Motorola as a separate company and is not interested in competing with them for the consumer.
The partners may be taking some solace in the fact that the search giant does not have a stellar record on consumer products, as evidenced by the anemic sales of the company’s laptop, Chromebook, and its Nexus smartphone, which was pulled off the shelves earlier this year.
Analysts and tech observers said that if Google really wanted to appease Samsung and HTC, it would sell the hardware-making units and just keep the patents, which would eliminate the competitive threat.
While that is still an option, a number of sources said it will use Motorola to develop a more seamless platform, melding hardware and software like Apple.
Apple iPhones control 26.6 percent of the smartphone market, while Android controls more than 40 percent.
Yet Apple sold $13.3 billion worth of iPhones and related products and services last quarter. Android is not a moneymaker for Google.
Wall Street is worried the Motorola buy is yet another risky bet, especially for a company with a limited and poor record of selling its own hardware.
Windows Phone 7 has not caught on, and RIM is falling off with its latest BlackBerry phones and failure to launch its QNX software phones.
The market is ripe for even more upheaval, with RIM’s BlackBerry potentially up for sale to a manufacturer looking for software or some other similar acquisition, according to analysts.
However, HP ditched its webOS mobile platform last week, freeing up another potential acquisition target, but also showing how difficult it is for a company to control both the hardware and the software.
More than a server
Google’s CEO Larry Page needs to focus more on the customer after the search giant’s first two forays into consumer products— with Nexus phone and Chrome notebook — failed.
Handset numbers
Google’s Android 40.1%
Apple’s iOS 26.6%
RIM’s Blackberry 23.4%
Microsoft’s Windows Phone 7 7.5%
