Originally published: August 15, 2011
Last updated: August 15, 2011 - 2:40pm
This deal could end up being a disaster. How? For starters, the deal creates major channel conflict: Google is now competing with its partners. And hardware manufacturing is an entirely different kind of business than Google's core business. And hardware manufacturing is a crappy, low-margin commodity business. And Motorola is massive -- Google has just increased the size of its company by 60%. And the deal appears to be purely a defensive move, not an offensive one. And so on.
Larry Dignan, on the other hand, says six reasons the deal makes sense:
- Integration may be all that matters in the wireless industry;
- Google lands its patent treasure trove; Google gets a TV play;
- There’s a good chance that Google can keep hardware partners in the fold -- for now;
- The deal forces Microsoft’s hand: there’s no money in third party operating systems in the mobile space. The upshot: Mobile software players need a hardware component. As a result, Microsoft may be forced to acquire a hardware player.
- With Motorola, which has some enterprise credibility and Android innovations, Google can enter the enterprise easier. As a result, RIM increasingly looks like the odd man out. Nokia is already under fire as it waits for Windows Phone 7 to gain traction.
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