In the last class we discussed about various reasons of Google buying Motorola Mobility for 12.5 billion dollars, I would like to identify key insights about this matter from different perspectives presented through online community.
When one can team up with the secondary competitors to drive the biggest competitor out of the sight, it is considered a reasonable move for anyone who is worrying about being defeated by the biggest enemy, especially when the enemy grows steadily.
Google made a clear statement acknowledging that "a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents". CPTN and the Rockstar bonding together to sue Android device manufacturers is not news. In the previous articles I talked about Apple suing over HTC for 10 patents. This time Google is finally taking the defensive action by acquiring Motorola Mobility, especially targeting at its patent portfolio. Google pointed out in the article about the group tried to impose a tax for any manufacturer that chooses Android as the operating system. This not only gives less incentive for the mobile device manufacturers to use Android, but gives Microsoft more opportunity to gain traction for its operating system.
Motorola has around 24,5000 patents. After losing its pi billion bid on Nortel, Google got worried about the whole Android system and did not give much thoughts on acquiring Motorola for $12.5 billions. Instead of paying for imposed taxes, Google would rather spend this amount of money just to protect their business. This is just like me never wanting to rent textbook, because those textbook rental services can make so much more in the long run just for one book. Maybe this isn't a perfect example, but I argue that Google's move is on the right direction but with the wrong bid.
I wonder why the success of Android system is threatening the other businesses? Because Android is too good to be true. It is free and open-sourced. It gives manufacturers no second thought on choosing an operating system for their devices. Thus, Android is owning the mobile operating system market and growing in a steady pace. For Microsoft, since they entered this mobile territory late, so they have so little market share that the network effect is kicking in by the success of Android. For Apple, they just detest any threat that will hinder their revenue.
However, is that the whole story?
Why is consumer preferring Android over Windows Phone? Is it simply because Android is free and open-source with the early emergence in the mobile market? Or is it because Microsoft cannot keep up with the game that they cannot impress consumers with their precious operating system? I've never used their phone, so I can't speak for Windows Phone user. But I know people tend to embrace open operating system with community care, just as why we have a liberal society here at USA.
My other different take on the same topic is in this video: