Google’s acquisition of Motorola Mobility yesterday was one of the most significant events in the so-called “smartphone wars” to date. Google appears to be not only making a land grab for a big pile of patents, but they’re also inching closer to an Apple-like business model of controlling both the hardware and software to create the best Android experience for the user. That sounds great, but they also bent over backwards to reassure the tech world (and their other business partners) that licensing the Android OS (for free) to other phone makers will continue without change. They’re essentially hedging their bets. How will this play out? Let’s check in on the history of Google’s two biggest competitors to get a hint…
Back when you couldn’t read a news story about Apple without the word “beleaguered” in the title, the company was on the ropes. Windows 95 was eating the Mac OS’s lunch, and the company was bleeding money. Then-CEO Michael Spindler decided that Apple was going to license the Macintosh operating system to other PC makers, while at the same time continue to provide the same all-in-one solution they had since the Mac’s launch in 1984. What happened? Clone makers like Power Computing came out strong with competitively priced Macs that did little to expand market share, but did a lot to eat into Apple’s own bottom line. When Steve Jobs returned to Apple in 1997 he made it priority number one to shut down the clones and focus on what they did best, and the iMac was born a year later.
By the early to mid 2000’s Microsoft was watching the music world pass them by as the iPod and iTunes were on the rise to dominance. Being a software company, they decided to create a software ecosystem called Plays For Sure that they would license out to hardware vendors to assemble an army of iPod killers. After that went nowhere fast, Microsoft switched it up and teamed with Toshiba to create an all-in-one device called the Zune, while reassuring its hardware partners that they would still license the Plays For Sure technology. It didn’t take too long for Microsoft to realize that this fragmentation only caused confusion in the marketplace (not to mention tepid sales) and they killed Plays For Sure, leaving hardware makers and their customers out in the cold.
I find it hard to believe that Google will try to hedge their bets the way that Apple and Microsoft did. Maybe it is all about the patents. Or maybe they want to create their own killer device that eventually sucks the oxygen out of the room for the other Android licensees. As is always the case with Google, it’s about ad sales, and if they can get more eyeballs focused on Google ads by squeezing out their partners than so be it. When you give away your software for free you don’t exactly cry the blues when that revenue of nothing stops coming in.