What remains of Motorola?

An interesting analysis in which the editor-in-chief of the GigaOm blog discusses the fate of Motorola. Pictured is Sanjay Ja, CEO of Motorola.

When Google introduced its Nexus One phone, everyone suddenly saw that the connected ecosystem of Android is a monster with three heads: Qualcomm supplies the processor, Google the operating system, and HTC the priority device manufacturer. (The same triad existed in WinTel’s writing world: Microsoft, Intel, and Dell.) It’s now clear that the Nexus One pulled out Motorola and its CEO Sanjay Jha, who risked betting on Android.

In Googleplex, where the presentation of the new product took place, Google made every effort so that its partners did not have the impression that they decided to circle them around the finger. Google even invited Ja to the presentation: he went on stage and mumbled some kind of polite nonsense. Many noticed that he was late (“traffic problems”) and left the event immediately after completion.

You can call me a cynic, but guys with corporate jets get stuck in traffic jams only on their own. By his gestures and behavior, it was clear that the Nexus One did not cause much enthusiasm among the Motorola leadership, especially since it itself installed the entire bank on Android. I have two very serious sources in the mobile industry that confirm this.

If I were Ja, I would feel that I was cleverly circled around my finger. Verizon's Nexus One will be available soon and will hit Motorola Droid sales a lot. The winner’s laurels will once again go to HTC, the Taiwanese manufacturer in which Qualcomm has a minority stake.

“We made an investment in HTC very early, and I personally knew Peter Chou (Peter Chou, HTC CEO - approx. Per.),” Said Qualcomm chief Paul Jacobs two years ago in an interview with Brook Crosers Crothers) from Cnet. Speaking about Android, Qualcomm and HTC, Jacobs then said these words: "These are people who have long known each other for years of work in the wireless communications industry." Personally, I’m very interested in whether HTC is going to create a smartbook or tablet based on Qualcomm and Chrome. (It is the close relationship between Qualcomm and HTC that explains why HTC is going to port its Sense technology to the BREW platform, which is gradually moving into oblivion.)

Yesterday (January 6 - approx. Per.) RBC Capital Markets analyst Mark Sue estimated that Motorola sold 12.5 million mobile devices in the fourth quarter of 2009. A little earlier, his estimate was slightly higher - 13 million. The reason for the decline, he called the poor sales of CLIQ, which is engaged in T-Mobile USA. At the same time, Motorola in the short term puts on the USA and China, and only after that plans to expand to Europe. Although Droid sales have already reached a million, Motorola is still hanging by a thread, and any turmoil in the market - such as the Nexus One - could break this hair. The same version of Nexus One for Verizon will directly compete with a future device that Motorola intends to sell to Verizon customers. I'm talking about a MotoBlur device, code-named Calgary, which Mark Sue reported on.

That's why the Nexus One is a knife in the back of Motorola. And what options do Ja have? Call Steve Ballmer, Microsoft Chef? No, this is a terrible idea. Microsoft itself is unable to stop the rushing Android train. But even if she does, Motorola does not benefit from this at all: she still needs a non-Microsoft operating system. Perhaps LiMo or Symbian? Also not the best choice.

Motorola needs something else: it should take an example from Apple and RIM and begin to rebuild vertical integration. And for this, she needs to buy a Palm. As I said before, Palm has an excellent OS and several other strengths, including Jon Rubinstein and his team, which has a lot of guys from Apple. The Palm team has to do the software, and the Motorola engineers do the hardware. And in terms of hardware, Apple needs to borrow design and manufacturing principles that Rubinstein is well aware of.

I wrote back in March 2007 that Motorola should buy a Palm. The tactical reasons for this that I cited then are no longer relevant, but the strategic imperative for the merger of these companies is still relevant: Palm needs scale, Motorola needs software. This is the only way Motorola can decide its own fate, and not depend on external sources, whether it be Android or any other OS. Over the past three years, both of these companies have turned into a pale likeness of themselves in the past. Now they do not have a minute to delay. For Rubinstein and Jah, it's time to pick up the phone and dial the number.