A match made in heaven?

Following Google's buyout of Motorola Mobility, Sam Trendall asks if their relationship will blossom

Google's $12.5bn (£7.7bn) buyout of Motorola Mobility is surely the biggest union the mobile industry has ever seen. But questions remain over whether or not the coming together, undoubtedly a marriage of convenience, will turn out to be a match made in heaven.

Motorola was a founding member of Google's Open Handset Alliance in 2007. The conglomerate of network operators, software houses and hardware manufacturers helped develop and popularise the Android operating system, which Google acquired in 2005.

For the past three years, Motorola has run all its mobile devices on Android, including its Xoom tablet PC. Many of Motorola's big-name rivals also run mobile devices on Android, including Dell, HTC, Samsung, LG and Acer.

Google's buying into the hardware space has undoubtedly raised a few eyebrows but, in a blog post last month, the search engine giant's chief executive Larry Page stressed his firm's commitment to continuing its work with a range of device vendors.

"This acquisition will not change our commitment to run Android as an open platform," he wrote. "Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android's success and we look forward to continuing to work with all of them to deliver outstanding user experiences."

If outward appearances are to be accepted at face value, Google's long-time hardware allies are not spooked by the Motorola buyout. Immediately following the deal, HTC, LG, Samsung and Sony Ericsson all put out supportive statements praising Google's commitment to "defending Android and its partners".

But Carolina Milanesi, research vice president at Gartner, believes that underneath the show of support, Android-based hardware vendors will be somewhat worried.

"Google's Android partners will be concerned about whether or not Google's efforts to reduce fragmentation will restrict their freedom to differentiate on UX [user experience] - especially if Google only promises its patent protection to those that comply with its vision for Android," she says.

But Milanesi (pictured, below left) points out that, as of now, device manufacturers have few other places to turn.

"There is little alternative elsewhere," she explains. "Microsoft would offer a similar environment where Nokia is the preferred partner and licensing webOS - if HP decided to offer it - would mean starting from scratch with a new OS."

Shaun Collins, managing director of analyst CCS Insight, agrees that the likes of HTC, LG and Samsung may harbour concerns about the Google-Motorola tie-up.

"The statements of support will be accompanied by greater nervousness and a re-evaluation of alternative software options," he says.

"This is unlikely to result in defections in the near term, but Google may ultimately find that Android suffers from the same problems that beset Symbian: an ostensibly open operating system dominated by a single manufacturer."

One of the key battlegrounds for Google-Motorola in the coming months and years will be the tablet space. Analysts' numbers vary - pretty wildly - but all seem to agree that to some extent, Apple's utter dominance of the market is being slowly eroded.

Recent data from Strategy Analytics gave the iPad a 61 per cent market share during 2011's second quarter. Android tablets accounted for 30 per cent of the market, a tenfold year-on-year market share increase.

Data from Nielsen released in May claimed the Motorola Xoom held a two per cent slice of the market, behind the Samsung Galaxy Tab with four per cent and the Dell Streak with three per cent.

Research house IHS iSuppli sees things a little differently, projecting that almost three quarters of the 60 million tablets that will be sold this year will be iPads. By 2015, the analyst foresees annual tablet sales reaching 273.5 million, with 43.6 per cent of these being Apple devices.

Manufacturers of Android tablets are finding their sales stymied by comparatively sluggish development of content and applications, said IHS.

Rhoda Alexander, senior manager of tablet and monitor research at the analyst, said: "With Apple lapping its competitors, many of which are still struggling to get out of the starting gate, this remains a one-horse race."

Gartner's Milanesi asserts that the tablet market will continue to revolve around three technology stacks: Google-Motorola, Nokia-Microsoft and Apple. "This is already the case today if you look at [market] share, with the difference that currently Nokia is on Symbian and that will transition to MS," she says.

"You also still need to factor in RIM for the enterprise market."

But Milanesi refutes the suggestion that the Motorola Xoom will become the iPad's main challenger.

"Sales have been limited so far and, from a hardware per-spective, the Samsung Galaxy Tab 10.1 is much better," she adds.

Both Milanesi and CCS Insight's Collins believe that Google has no designs on becoming a big player in the hardware arena. They agree that the primary motivation for the deal is likely to have been the search engine giant's desire to get its hands on Motorola's impressive array of mobile intellectual property.

"If a hardware play were Google's primary motivation, HTC - rather than Motorola - would have been the target," says Collins.

"HTC benefits from greater scale and substantially more comprehensive distribution. Motorola has amassed a handset patent portfolio that is arguably second only to Nokia's. We believe it is this strength in intellectual property, and not device manufacturing and distribution, that prompted Google to acquire Motorola."