Palm's dead baby, Palm's dead ... or not?

    We live in an interesting time. The time when the telecommunications market is completely rebuilt. Old-timers squeeze and leave, new heroes and leaders appear.

    Almost simultaneously, the market was blown up by two high-profile news, the consequences of which we will observe, in my opinion, for a very, very long time. News that in the future will have a significant effect on the alignment of forces in the market - Google’s acquisition of Motorola and HP’s news of winding up WebOS. It seems to be events that are not related, but, in my opinion, there is something in common between them.

    To start, I’ll share some thoughts about the Googorola deal. Over the past few days I have heard the opinion that such decisions do not arise spontaneously, but have been prepared for many months. But it seems to me that in this case, this is not entirely true, and I will try to explain why.
    image
    The acquisition of Motorola is a logical step in principle. Yes, patent wars flare up more and more, Google, through the attack of competitors on its loyal manufacturers, is under very strong pressure. Moreover, after the failure with the attempt to acquire intellectual property of Nortel Networks (6 thousand patents), the giant’s problems may increase, so the company needed powerful trump cards. And the patent portfolio held by Motorola (24.5 thousand patents) is a weapon that will protect the company in the future. It is clear that this is precisely the main motive of the transaction.

    But at the same time, very important slippery moments arise that raise the main question - why was it necessary to acquire the manufacturer, instead of acquiring exclusively intellectual property from him? Motorola has long been no longer a leader in the industry or in the North American market. Yes, the company's merit in promoting Android is priceless, but the dividends received from this are enough for the company to stay afloat and nothing more. Motorola is a strong middling, lacking stars from the sky with its technological or software developments. Moreover, the company is currently represented in fact in only two markets - America and China. The acquisition of such a manufacturer for the purpose of future implementations of reference devices is a moot point.
    image
    The following should be understood: Google itself becomes a device manufacturer. And the words that this fact will not affect the policy of relations with other manufacturers are just words. The company will now have to provide certain preferences for its production in order to profit from its division, to increase its market share. This is a business. And this cannot but unnerve other partners of the company. For them, it becomes necessary to compete not with Motorola, but with Google.

    For a counter-example, let us recall the deal between Microsoft and Nokia. According to official statements, this transaction is in the form of equal partnership. At the same time, on the one hand, Nokia does not receive any exceptional preferences, and on the other hand, Nokia itself said that the software developments that it will make as part of the development of WP7 will be available to other manufacturers. The situation for manufacturers using the WP7 platform is theoretically becoming more profitable than using Android.
    image
    It is believed that Google will curtail production, concentrate on R&D, and downsize Motorola. Here is another slippery moment - Google has acquired 19 thousand mouths, which are registered with Motorola. Google itself has 29 thousand employees for comparison. An increase in staff by 60%, and at the expense of personnel working according to a different ideology, is not a particularly pleasant step for the giant. At the same time, I’m sure that no one will allow Google to lay off during the American crisis, and even from a profitable company, whose name is largely associated with America. If there are any such insignificant thoughts like that, the deal will simply not be approved, and the company itself will pay $ 2.5 billion in compensation .

    So why did Google acquire Motorola, instead of acquiring a patent portfolio? In my opinion, this is an unconditional victory for Motorola management. Yes, negotiations may have been conducted for more than one month, and that is why, being confident in their abilities, Google allowed itself to clown in bidding for Nortel Networks . But Google was interested in acquiring Motorola's intellectual property, negotiations were underway on this topic, and Moto management insisted on acquiring the entire company in the load. And as an important signal, they hinted that they were theoretically ready to cooperate with Microsoft in creating special conditions, which served as the final chord - the announcement of the acquisition. It was then, in my opinion, that a very hasty decision about the deal matured.

    In principle, all these are quite obvious things, clearly reflected in financial indicators. The announcement brought a substantial increase in Motorola shares and a drop in Google shares.
    image
    But what is the connection between this event and the announcement of the cessation of development related to WebOS? Most immediate:
    HP CEO Leo Apotheker has already indicated that he's totally open to licensing webOS to other companies, and he's now confirmed that HP has, in fact, been in talks with a "number of companies" about that possibility.

    What used to be called Palm now is a tidbit. On the one hand, it’s a ready-made WebOS platform that any manufacturer can buy if desired. And in a situation where the market will have to compete with Google itself - the presence of its own platform becomes the most important advantage, a necessary bail of salvation, in which you can hide when the hard times come on the Android market. Samsung has a Bada, HTC has a number of acquisitions that hint at possible developments in this area.

    ExPalm, on the other hand, is intellectual property. From 1.6 thousand to 4 thousand patents according to various estimates. And in the context of flaring up patent wars - this is a very strong trump card.

    Therefore, the decision of the HP management to curtail the WebOS-direction appeared at an exceptionally good time - it is quite possible that HP will be able not only to return the spent, but also to come out with profit, despite the bad experience.
    image
    How many times have Palm been buried, but somehow it continues to exist. And I suspect it's too early to put an end to the history of this name. In the near future we should expect no less interesting news about the future of WebOS, and we can only guess about the future of the market. But, in my opinion, Android has a hard time ahead.

    Also popular now: