Debra Littlejohn Shinder analyzes how the deal between Google and Motorola Mobility will affect Microsoft and its efforts to regain a foothold in the smartphone business.
The tech press is divided over whether the Google/Motorola deal announced this week is a good thing or a bad thing for Android. They're also in disagreement over whether and how the deal will affect Microsoft and its efforts to regain a foothold in the smartphone business.
Given the nature of my column, the first thing I thought when I heard the news that Google was acquiring Motorola Mobility was "Is that a good thing or a bad thing for Microsoft?" It seems most of my fellow tech analysts and "opinionators" are thinking along the same lines; many of the early headlines regarding the Google/Motorola deal mention or even feature the potential effects on Microsoft.
Those opinions seem to be all over the board, even within the same publication. Zack Whittacker over at ZDnet suggests it might motivate Microsoft to buy Research in Motion (RIM), whereas Mary Jo Foley says "Nah." They both make good points, but I'll throw in with Mary Jo on this one.
Nokia, maybe; RIM, not so much
Buying Nokia might have made sense, although I think the decision to form a strategic partnership instead was the better way to go. Nokia was ripe to switch to a new operating system; they already seemed headed in that direction when they started developing Maemo (a smartphone/tablet OS based on Debian Linux) and later MeeGo (which Maemo morphed into), despite Nokia's declaration of allegiance to Symbian.
Despite the fact that Symbian in 2010 had the largest market share of any mobile operating system (37.6%, compared to 22.7% for Android, 16% for RIM, 15.7% for iOS, and 4.2% for Windows phones), it has never seemed to have the kind of brand loyalty that other platforms elicit from their users.
Blackberry users are outdone only by iPhone fans when it comes to their strong feelings about their OS of choice. I've never heard anyone enthuse about the Symbian OS, even those who use it. On the other hand, many of my "Crackberry" friends will tell you that "you can take it when you pry it from my cold, dead hands."
Thus the announcement that Nokia was killing Symbian (at least in the United States and Canada) and would be running Windows on all their smartphones didn't raise much of a hue and cry from Symbian users. But can you imagine the outcry if Blackberry users discovered that their favorite OS was going to be replaced by Windows Phone? Yes, yes -- we know RIM already has plans to pry the BB OS from users' hands and replace it with QNX. But I don't think that has the same psychological effect as replacing it with Windows.
Many BB loyalists are not at all fond of Microsoft; the rivalry hearkens back to when, not so long ago, RIM and Microsoft were considered the top players in the U.S. smartphone market. Of course, then the iPhone came along and turned the smartphone world on its head. In fact, for a while there it seemed as if the only people who didn't embrace the iPhone were Blackberry users.
While some see the Google/Motorola deal as a nail in RIM's coffin, others predict that both RIM and Microsoft will benefit from it. Interestingly, following the announcement, stock prices for both Nokia and Microsoft rose, suggesting that the market thinks they might be on the winning end of the deal. RIM's stock was up, too. More telling was the fact that Google's own stock took a fairly significant dive. Motorola Mobility's stock, on the other hand, was up slightly more than Google's was down. Of course, the stock market is volatile and initial reactions can easily reverse.
Nokia representatives were upbeat, with spokesman James Etheridge going so far as to say that this could end up being "a massive catalyst for the Windows Phone ecosystem."
Android's loss = Microsoft's gain?
The Android platform has been steadily gaining market share, it was on 48% of smartphones worldwide last quarter, according to research firm Canalys. But much of that success has been due to the popularity of "superphones" made by vendors HTC (Incredible/Incredible 2, Thunderbolt, EVO) and Samsung (Galaxy S, Droid Charge, Infuse). Motorola has had some hits, as well -- particularly the Droid X -- and hopes are high for the dual-core LTE Droid Bionic that's expected to go on sale at Verizon next month.
However, anecdotally speaking, I've heard far more complaints about the original Droid, Droid 2, and other Motorola handsets than about other manufacturers' phones. The MotoBlur UI is generally recognized as the least polished of the three big vendors' overlays, and based on my own hands-on testing of various Android handsets (thanks to Verizon) and the experiences of friends and family members who own the phones, performance often seems sluggish in comparison to HTC and Samsung models. There were high hopes for the Xoom tablet and the Atrix phone with its innovative laptop dock, but sales didn't reflect the enthusiasm of early reviewers.
Of course, there's a good chance that if Google takes over the Moto Droid line, they'll ditch MotoBlur and go with the standard Android interface, which would make Android purists very happy. But whatever they do, there's also the possibility that -- despite Google's public statements that its other hardware partners are completely "on board" with the Motorola deal -- those vendors may be a little less enthusiastic about developing fantastic Android phones.
That doesn't mean they're suddenly going to put their blood, sweat, and tears into making killer Windows phones (after all, given Microsoft's deal with Nokia, they have the same demotivation there). However, our own Jason Hiner has speculated that the Google/Motorola alliance may push at least one current Android vendor, HTC, in Microsoft's direction -- and maybe even make that company amenable to a buyout offer from Microsoft.
If Microsoft did indeed buy both HTC and Nokia, as Jason suggests at the end of his article, it could potentially put them in a far stronger position in the smartphone market. However, to really compete with Android, I still think Microsoft needs to reexamine its platform philosophy and decide whether Windows Phone is going to compete with Android or with the iPhone, because, as I see it, the two target audiences are very different ones.
Those who like the iPhone are willing to sacrifice freedom and flexibility for a smooth, "cool" experience. Those who prefer Android abhor the idea of being locked into iTunes for updates, want to be able to mount the file system and directly transfer files between phone and computer, want to have the ability to swap out microSD cards to add storage space or to move files, and so forth. In other words, all those things we also used to be able to do with Windows Mobile.
Thus far, the new and improved (in many ways) Windows Phone has been more like an iPhone than a Droid. If Microsoft wants to go after Apple customers, that's probably the right path. But if they want to take advantage of a possible opportunity created by Google's deal to grab some of the Android market, Windows Phone 8 is going to need to have those features that are driving many to buy those HTC, Samsung, and Motorola Android-based phones in the first place.