Monday, August 15, 2011

Google acquires Motorola Mobility! One insider I spoke with...

One insider i spoke with a few months ago said one reason they split the company was that mobile wasn't making money and was "a drain on resources". The same insider also said Motorola Solutions, the other half, was highly profitable.

Still, it is a good move by google. I anticipate that this will bring down costs for Android handsets while increasing competition within the smartphone arena. Despite lower smartphone prices, they are still too expensive and contribute to the current economic models for carrier services that  are designed to maintain price amplification.

Traditionally Google have priced products cheaper than most of their competition and I have no reason to believe this will be any different. I hope part of their plan includes becoming a new carrier, although this will not happen in the near future unless they plan to spend tens of billions, in the short term, on acquiring and building their own infrastructure.

Motorola Mobility has decades of mobile experience, an established, albeit, floundering distribution network and some of the best design pedigree in the space.

This is one to watch closely.