Motorola Products Disappoint Google CFO: Truth Or Politics?
While speaking at the Morgan Stanley Technology Conference, Google CFO and Senior VP Patrick Pichette made a statement that sent shockwaves through the tech world. It also made some realize that the X Phone Google and Motorola have been working on will not be released anytime soon. When speaking about Google's acquisition of Motorola he revealed that while inheriting Motorola, Google also inherited an 18-month pipeline of products from Motorola, and "not really to the standards that what Google would say is wow - innovative, transformative."
Google acquired Motorola in May 2012 for $12.5 billion, marking both its biggest acquisition ever and confirmation of Google's transition from a search-and-software company to a consumer-gadgets maker. Google didn't only buy Motorola to expand its hardware business, it also acquired the company for its very large patent portfolio. When the deal was announced it left many of Google's Android licensees wondering if the deal was a conflict of interest, since Google had only committed to building the Android OS, not selling its own hardware.
The acquisition also has been rumored to affect the company that Google makes most of its Android money from: Samsung. It reportedly made Samsung rethink its future with Android, and is seen as a major reason Samsung has gone ahead with plans to release smartphones running its own mobile operating system it created with Intel, called Tizen.
Recently there was news that Google felt uneasy about Samsung's success with Android and that Samsung might use that leverage to ask for more than the 10 percent it receives from Google in ad revenue, since Samsung sells 40 percent of all devices running Android. During the conference Google's CFO addressed the situation and praised Samsung and said that Google and Samsung continue to enjoy a "terrific relationship."
Is Google's CFO really being totally honest about Motorola's pipeline? Some view it as a possible ploy to try and calm down current Android licensees and also set the stage for the X Phone that Google and Motorola have been working on.
Google's CFO only spoke about Motorola's pipeline of products, not the products, including the X Phone, that Google and Motorola have created since the acquisition. Google knows it needs to keep Samsung, HTC, LG and other Android licensees happy. So making a public statement in that way seems a little suspicious. He made sure to say that Motorola's pipeline of products is "not really to the standards that what Google would say is wow — innovative, transformative. We have to go through this transition. These are not easy transitions."
When Google announces the X Phone it is likely to be a "wow, innovative and transformative" smartphone that was built by Google and Motorola and was never in Motorola's 18-month pipeline.
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