Altabel Group's Blog

Will Google-Motorola deal drive Microsoft toward HTC or Nokia?

Posted on: August 29, 2011

Google buying Motorola Mobility is destined to cause a major shake-up in the Android ecosystem, but it’s also going to reverberate across the entire mobile space. In light of Apple’s success in vertical integration and Hewlett-Packard buying Palm, the Google-Motorola deal could now force Microsoft to buy out one of its hardware partners in order to keep pace with its rivals.

The deal is a big win for Motorola Mobility, which has produced some of 2011’s most innovative Android devices — the Motorola Xoom tablet and the Motorola Atrix and Motorola Photon Smartphones — but its products have suffered from tepid sales, been a little bit ahead of the market, and have sometimes gotten lost in the shuffle of the burgeoning market of Android devices. Putting the Google brand name on these Motorola devices would immediately give them a lot more marketing punch and consumer appeal.

But, Google is also going to have to deal with fallout from other Android partners. A lot of companies have been rallying around Android over the past 24 months — Samsung, HTC, LG, Lenovo, ASUS, and many more. Google just made all of them feel like second-class citizens in the Android ecosystem. They will start worrying that Google is going to keep its best Android innovations close to the vest, release them on their own Google-branded devices (made by Motorola), and then let the rest of their hardware partners scramble to find a niche to innovate on.

The biggest potential loser in the Motorola deal is HTC, a much smaller company that’s focused primarily on Smartphones. HTC is all about design, innovation, and being first to market with cutting-edge devices like the HTC ThunderBolt, which was the first Smartphone to run on Verizon’s next-generation LTE network. You have to think that in the future, companies are now going to partner directly with Google for leading-edge Android devices.

This could push HTC toward Microsoft. HTC was originally focused on Windows Mobile devices, but Android arrived on the scene at a time when Microsoft’s mobile strategy was unclear, so HTC shifted most of its effort to Google and delivered excellent designs, such as the Nexus One and popular devices like the HTC EVO. Still, HTC has retained its ties with Microsoft. When Microsoft pulled off its mobile reboot with Windows Phone 7, HTC jumped on board as a partner and has produced two of the best WP7 designs — the HTC HD7 and HTC Trophy.

There is still a lot more sales potential in the Android ecosystem than the WP7 ecosystem, so I wouldn’t expect HTC to abandon its Google partnership in favor of Microsoft. But I wouldn’t be surprised if HTC was suddenly a lot more willing to listen if Microsoft come calling with a buyout offer. With all of its main rivals — Apple, Google, and HP — now vertically integrated in mobile, Microsoft is going to have to seriously consider whether it has to go the same route. If it sticks to the third-party model alone, it will have a hard time keeping up, since it takes a lot more time to release software and coordinate with vendors than to have hardware and software divisions working hand-in-hand throughout the entire product development life cycle.

There’s also one other issue Microsoft has to consider: Nokia. Earlier this year, the two companies signed a huge deal to get Nokia to ditch Symbian in favor of Windows Phone 7 as its primary Smartphone platform. If Microsoft bought HTC and started releasing Microsoft-branded WP7 devices, it could sour the Nokia deal and push Nokia to pursue Android devices in addition to WP7 phones. With a Nokia partnership and joint development already in progress, it may simply be more likely that Microsoft would purchase Nokia over HTC — although if Microsoft wanted to get really serious about vertical integration in mobile, it could potentially purchase them both.

Best Regards,

Kristina Kozlova

Marketing Manager



Altabel Group

Professional Software Development


2 Responses to "Will Google-Motorola deal drive Microsoft toward HTC or Nokia?"

Hey, Thanks for posting this. You have made some really interesting point in this article. I like it and I’ll keep coming back. Bye!

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