A lot of people seem to be confused about why Google would sell Motorola now that it’s already starting to do so well with the Moto X and especially the Moto G. The $50 Motorola smartphone has also gotten a lot of people excited about Motorola’s prospects for the future. But now it seems Google is throwing all that away. Why?
I don’t think Google was too upset with Motorola not doing well financially so far, because I think they believed they can fix that problem in the long term. It’s simply that they decided Samsung going off and doing its own very different things, and buildings competing apps to Google’s own apps is a bigger danger than Motorola is an opportunity. So they decided that instead of making Motorola a success, it’s better not to make Samsung an enemy, but a close ally. Since Samsung already has a much bigger market share, you can see why it made a lot of sense for Google to try and appease Samsung by selling off Motorola.
I actually believe Google is much better off here than Samsung is. First off, Google sold Motorola to what is probably the biggest emerging threat to Samsung. Samsung may have thought Motorola is, because people like Google and therefore liked Motorola, and that’s true, but in a longer period of time. But a more short-term threat is Lenovo, who is starting to become serious about the mobile market and is already growing fast, reaching #4 rank in the market, behind Huawei. With Motorola’s market share added up, they are now above Huawei, in the 3rd place, right below Samsung and Apple. And they haven’t even begun yet.
Second, I think the patent deal between Samsung and Google has been a little underplayed, but it’s actually a pretty big deal for Google, more than it is for Samsung. Samsung has its paws on everything in all industries, and I believe Google will eventually try to do much of the same. They’re going into cars, robots, home automation, wearables, and who knows what else in the future. That 10 year patent deal with Samsung might suit them well.
By selling off Motorola, Google got Samsung to respect Google’s vision for Android in the future (probably not in time to make many changes to what Samsung has already planned for the Galaxy S5, though). Google wants to “fix fragmentation”, and to do that it needs to control much of what is going in the market, from the type of UI many “Android” phones have, to what kind of apps they have on board. If they managed to do that with Samsung’s devices, too, which represent 40 percent of the Android market, then that may be worth giving up Motorola.
I don’t expect this to make Google/Motorola fans very happy, though, because they expected a certain future for Motorola devices, and nobody knows what’s Motorola’s future under Lenovo yet. At the very least they can hope Google will make a bigger deal out of the GPE devices. That Moto G GPE is starting to make a lot of sense now, doesn’t it?