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Google is All-In with Motorola Purchase

|Includes:AAPL, Alphabet Inc. (GOOG)

A year ago, at ZDNet, I was railing against Google crapware.

The Samsung “Android” phone I'd gotten from my AT&T store was filled with crapware – programs placed there by AT&T and Samsung. Some seemed to want me to pay for things I knew the phone could do for free. And I couldn't get rid of them. Still can't.

This is hurting Google's brand, I wrote. When people get an Android phone they expect that Google is standing somewhere behind it. Even if they got it from a carrier, no matter whose brand name is on it, there are brand expectations here the phone's not meeting. What I found on reading other blogs and investigating things further was that, not only was this the case, but there seemed to be little the company could do about it.

Turned out there was.

Over the last year Google has steadily taken more-and-more control over Android. They updated my software, in the background, and it's better. They imposed new conditions on OEMs and stopped talking so much about the Open Handset Alliance in favor of the Android brand. Now the main differences I note between my phone and my daughter's iPhone are that my GPS is an energy hog, and her music integrates well with her phone.

The news peg here is Google's purchase of Motorola Mobility, the shank half of the Motorola ham, for $10.5 billion, which includes a $2.5 billion “breakup fee,” money that will go to Motorola if for any reason the deal isn't consummated

Much of the early talk about the deal was it was about patents. Motorola has thousands of patents. But as Florian Mueller notes at his excellent blog FossPatents, Motorola is in court against Microsoft, Apple and many trolls over other patents, and Motorola's court cases are not going well.

No, this is about control. By having a real Google phone, designed by Motorola and produced under Google's direction, in the marketplace, Google sets a bar for every other Android phone maker (think Samsung and HTC). By having its own name and design out in the market, and its own name on Motorola's lawsuits, Google can also face the legal difficulties of its OEMs squarely, like the sibling whose kid brother is getting beat up and finally comes outside.

“You want a piece of me? You want a piece of The Goog? Well here I am, come and get me.”

Which they will.

Apple has been down this road before. Apple innovated the Macintosh but was unable to keep Microsoft out of the market. The low costs of Microsoft's OEMs, and their enormous production capacity, eventually took the PC market from Apple, 20 years ago. People were willing to wait years to get Windows rather than pay-up for the Mac.

This time the playing field is more level. Apple has learned to work with Chinese OEMs to control its costs. Apple has also accepted changes in the patent system aimed at giving it a long-term monopoly over its key features. And that's the battle that is going to play out over the next few months and years.

It's a battle Apple will lose. Not because things aren't exactly as Apple wants them, within the patent system. It was beating Motorola in court, it seems to have Samsung on the ropes in Europe, and in the ITC it has a venue that can give a quick, sure remedy – exclusion of imports for products that don't comply with American patent law.

But it's still going to lose. Because Chinese and Indian courts won't give Apple the monopoly it seeks. Because that's where most of the growth is. And because in the long run consumers won't be denied. Americans aren't going to sit around on their hands for the next 15 years, buying only Apple phones and only Apple tablets, buying apps only from Apple stores, with no choices available because the law won't let it be so, while consumers elsewhere are free to get the latest innovations at lower prices.

It ain't going to happen. Google doesn't need a new patent law to change the legal environment. It just needs some decisions to go its way. And the protection Apple has in the market isn't written into the patent law, it's in interpretations of that law by courts during the 1990s and the refusal of recent courts to re-examine those decisions.

Getting from monopoly to competition is going to take money. But it has proven to be a prize worth fighting for. Because once you control mobile Internet clients you control the mobile Internet, which means you have control over the cloud, and the larger computing environment. This market may have started as a sideshow, but it's now the whole ball of wax, Larry Page is smart enough to know it, and he's going to fight for it with everything he's got.

As the sneaker commercial says, with the Motorola deal Larry Page is all-in. Google is all-in. Fasten your seat belts, it's going to be a bumpy night.

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