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How the Google-Motorola Deal Could Impact You

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Google’s $12.5 billion bid for Motorola Mobility Holdings has one headline-grabbing benefit for Android customers. By gaining access to Motorola’ 17,000-strong army of patents, it’s less likely to run into lawsuits over its Android mobile software by competitors. “It’s good for consumers that love Android phones and devices in countries that they could be blocked by the ever increasing patent battle,” says Scott Sutherland, managing director of equity research at Wedbush Securities.

What’s more, Android aficionados have longed for the same smooth experience Apple fans have with iPhones, he says. Apple owns both the software and hardware for its iPhone, so it can tailor-make one for the other. Android Smartphones and apps are made by different manufacturers. The upside? Android lovers have more choice when it comes to devices and prices. The downside? The software/hardware isn’t always a perfect fit. Sutherland says Google and Motorola could bring more consistency to the Android market.

Google’s Android models will not only be run by Motorola’s software. Spokespeople for Google and Motorola tell Pay Dirt, “Motorola Mobility will remain a licensee of Android and Android will remain open.  Google will run Motorola Mobility as a separate business.” (Both companies declined to comment on analysts’ speculation in this blog.) “Google has to navigate a very thin line of being integrated and loving its children equally,” says Al Hilwa, software analyst at advisory firm IDC.

Executives for both Google and Motorola have also indicated that “smart TV” – where TV meets the Internet – is one big opportunity post-merger – if it goes through. “They’re a leading home device maker, and that’s also a big opportunity,” Google CEO Larry Page said about his prospective partner after the deal was announced on Monday. “There is great convergence between the mobile world and content that comes to the home through set-top boxes,” added Motorola Mobility CEO Sanjay Jha.

“We could see Google TV being included in a Comcast subscription,” says Hilwa. If you buy a new cable subscription, chances are it will be made by Motorola, he says, but Google could bring its software experience to the table. “They’re merging into the same spaces.” But Hilwa cautions that there may be a long wait for consumers. “We won’t see tangible impact to consumers right away,” he says. “These acquisitions usually take 6 months to a year just to close.” Pay Dirt readers, where would you most like to see change?

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About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.

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