6 ms·

Google's Latest Acquisition: The perils of licensing to your competitors

47 points by raganesh 15y ago

Jabbles 15y ago
I think two of Google's major aims will be to improve competition among Android manufacturers and use the experience gained from building its own phones to improve Android for all of them. That's not to say that Google won't make much money off the physical device, but I think Google's aim is to increase revenue from Android (ultimately adverts) by making the platform better.
ZeroGravitas 15y ago
Is it only me that think's this guy's a nutter that gets by by saying whatever Apple fans want to hear? Here's some of his startlingly wrong predictions about the smartphone market from last year: http://www.asymco.com/2010/11/03/what-do-you-have-to-believe-for-an-android-dominated-future/ http://www.asymco.com/2010/11/03/what-do-you-have-to-believe... His key arguments where that: * Android wouldn't grow faster than the average of RIM, Nokia, HP and Apple. * Nokia wouldn't dump Symbian&Meego for someone else's OS. * Android wouldn't do a great deal better than Windows Mobile * Android vendors wouldn't be profitable So not very good really, in fact a total blowout. Maybe he knows stuff about Apple, to be honest I think he's just like a sports fan during a season when his team is playing well. His elaborate theories of why they are succeeding don't seem to mesh with reality much, except in that Apple is doing very well, and I'm not sure he cares if they do or not.
- ugh 15y ago
  “Nutter”? Really? Being wrong doesn’t make anyone a “nutter”.
  - cooldeal 15y ago
    Maybe nutter is a strong word, but still, there is an obsession with taking numbers and 'facts' and trying to twist them into spin for Apple with dodgy long winded 'analysis/predictions' that doesn't stand five seconds of reason(except from the big Apple fanbase), all the while still trying to sound objective...
- barista 15y ago
  Besides android vendors aren't really profitable by big margins. Motorola in fact has continued losing money for past few years even after introducing android.
  - cooldeal 15y ago
    >HTC announced that its first quarter 2011 profits were up by a staggering 191 per cent to $511 million from the same time last year. Revenue figures were not too shabby either, showing 174 per cent growth, meaning that profit growth outstripped revenue growth, something that is particularly desirable on any balance sheet. Do you get your news from Apple centered sites and blogs and the comments there? There seems to be an element of cognitive dissonance(or perhaps PR rhetoric?). If this was MS, there would be shouts of paid shills, but I am not going there. Edit: Samsung made a profit of 1.5 billion dollars off their phones just last quarter.
    - rsynnott 15y ago
      See here, however: http://www.intomobile.com/2011/05/02/apple-has-50-profit-share-smartphone-makers-cant-hear-haters-behind-huge-wall-cash/ http://www.intomobile.com/2011/05/02/apple-has-50-profit-sha... While HTC's profits are unquestionably growing, their profit share actually declined a bit; remember it's a very rapidly expanding industry. Motorola Mobility, SE and LG are loss-making or close to it. Only Samsung is in a really strong position.
      - cooldeal 15y ago
        You think that's enough to support the following statement? >Besides android vendors aren't really profitable by big margins
        rsynnott 15y ago
        Samsung's profit margin is good, and HTC's acceptable (though neither are as high as Apple's), but all other major manufacturers are either loss-making or making a tiny profit margin.
- recoiledsnake 15y ago
  While I usually don't agree with the convoluted and twisted logic of Asymco, Gruber and Marco (they do get a lot of undeserved traction on HN thanks to its big section of Apple fans), I think this time he does have a point. It will be a tightrope walk for Google about who and how to share the longterm plans of the OS with etc.
  - ellyagg 15y ago
    Undeserved traction? Isn't Apple performing outrageously well with consumers and as a company? Were they not the largest capitalized company in the world at one point recently? If Apple were not being reported on here heavily (and positively), a site devoted to the intersection of hacking and business, that would be awfully weird, no? As far as I know, developer revenue from iPhone apps still dwarfs Android. Shouldn't that be pretty interesting to a community more than partly devoted to making money off of programming? If anything, I suggest the extremely large number of Google employees who participate here swings the bias the other way. I found it exceedingly odd that--regarding a story about a company paying $12 billion to buy another company, the type of move that is normally considered incredibly risky, and the type of move which does not have a great track record in the annals of corporate history--after making it 3/4 of the way down the comment thread here on HN, there was virtually no criticism. Really? This move is a slam dunk?
    - recoiledsnake 15y ago
      I was talking about _some_ posts from sites like Asymco, Gruber's and Marco and some HN comments. I don't know how you construed it as if my comment was against general(if a little overactive) Apple coverage, which is think is well deserved since Apple is doing a lot lately. You were attacking a strawman.
- amazingman 15y ago
  He's making much longer-term assessments about the evolving market. You seem to be calling it a "total blowout" from the perspective of a reality that hasn't actually happened yet.
- benologist 15y ago
  It's just one of many, many websites that makes their money by pandering to a niche. It's tasteless, but profitable.
  - cooldeal 15y ago
    >It's tasteless, but profitable. The problem is that they are bandied about as independent opinion and analysis. Gruber sells ads on his RSS feeds, which seem to cost thousands of dollars each, thanks to advertising by iOS apps. No wonder he plays to his fanbase with the pro-Apple and anti-Google/Android/MS rhetoric. He must be laughing all the way to the bank while thinking up his next 'The precisely perfect placement of the Chair at Macworld' and 'Dirty Percent' article. Also, he gets invited to Apple events, which may quickly disappear if he gets too critical(see Gizmodo).
    - ugh 15y ago
      Just because people don’t share your opinion doesn’t mean that they are purposefully lying. It’s a quite common fallacy, really.
      - cooldeal 15y ago
        "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" -Sinclair Regardless of the above quote, I do not accuse them of lying. But there's a strong elementy of hypocrisy and fanboyism, both in supporting Apple almost all the time, and screaming bloody murder and abject criticism of any moves by Apple's competitors. Do you seriously think analysis by Asymco, Gruber and Marco regarding Apple are the flawless gospel truth? The fallacy you mention would apply more to the accusations of commenters being paid MS shills, which happens all the time here on HN too.
        GHFigs 15y ago
        accusations of commenters being paid MS shills, which happens all the time here on HN hnsearch disagrees with you.
- rsynnott 15y ago
  He was largely right on profitability, no?
  - fpgeek 15y ago
    Not really. He forgot to consider the other set of companies making money from Android: Arms merchants like Qualcomm,TI and NVIDIA. For example, NVIDIA is pretty thrilled with all the Tegra 2 design wins they got from Android manufacturers.
    - msbarnett 15y ago
      He didn't "forget" them; the profitability of component manufacturers has no more to do with the fact that most Android licensee Phone manufacturers aren't turning much profit off the business than the profitability of shovel salesmen has to do with the fact that most gold prospectors never found anything worth selling.
      - fpgeek 15y ago
        Yes, it does. "Arms merchants" like Qualcomm, TI and NVIDIA are more than just "shovel salesmen". Among other things, they're the ones who do the first ports of Android to their chipsets. I don't remember where I read this, but they compete just as much as the phone manufacturers do to make it into "Nexus / Google Experience" devices. One of the big reasons profitability matters is because it drives future investment. To the extent that component manufacturers are making money porting Android to their components and selling the combination, they're going to keep investing, even if their downstream customers are locked in a brutal price war.
hollerith 15y ago
Google could shut down Motorola Mobility's hardware business, keeping its patents.
- recoiledsnake 15y ago
  Are you serious?
  - hollerith 15y ago
    Yes: it would alleviate the concerns of other other Android licensees, who currently own about 45% of the smartphone market.
    - recoiledsnake 15y ago
      Sounds very unlikely. If it was that they would've have announced it by now. Or the headline would be 'Google gets joint licensing(and right to sue) for Motorola patents for $6 billion'.
      - deleted 15y ago
        [deleted]
      - hollerith 15y ago
        I think the way the courts work is that only the patent owner can sue for infringement. And recent events tend to show that Moto Mobility would not have been able to continue to sell smartphones if they had sold their patents to Google.
        recoiledsnake 15y ago
        >I think the way the courts work is that only the patent owner can sue for infringement. I am not sure about that, companies like Intellectual Ventures/Lodsys do all kinds of manipulations. >And recent events tend to show that Moto Mobility would not have been able to continue to sell smartphones if they had sold their patents to Google. That wouldn't work like that. Google would (need to) provide patent indemnification to Android licensees like Microsoft does with their desktop Windows and mobile WP7.
joezydeco 15y ago
"Symbian was formed to be governed in a way very similar to the original Android via the Open Handset Alliance." Riiiiight. I was at an OHA company during the early Android days post-Google. OHA was created by Google to make their subcontractors look like "partners" in Android development. There was no boss other than Google in this project.
jfoutz 15y ago
So, Verizon needs to hire some coders and get cracking? It took Apple and Google years to produce a good modern phone OS. Palm took a shot at their own os, and as near as i can tell, they're gone now. Phone manufacturers made their choice a decade ago. They picked closed, complex, developer hostile platforms. Now, it seems, that was a mistake. Phone manufacturers get to fund Apple, Google, or Microsoft's, move into their markets.
Herring 15y ago
Unimportant. The patent problem needs to be solved Right Now, and it's worth risking a long term complication.
sudonim 15y ago
"The supplier is also a competitor" Wasn't there an article recently about how Samsung supplies a large chunk of the components in the iPhone? It's a different department but isn't it the same dilemma?

47 points by raganesh 15y ago

I think two of Google's major aims will be to improve competition among Android manufacturers and use the experience gained from building its own phones to improve Android for all of them. That's not to say that Google won't make much money off the physical device, but I think Google's aim is to increase revenue from Android (ultimately adverts) by making the platform better.

ZeroGravitas 15y ago

Is it only me that think's this guy's a nutter that gets by by saying whatever Apple fans want to hear? Here's some of his startlingly wrong predictions about the smartphone market from last year: http://www.asymco.com/2010/11/03/what-do-you-have-to-believe-for-an-android-dominated-future/ http://www.asymco.com/2010/11/03/what-do-you-have-to-believe... His key arguments where that: * Android wouldn't grow faster than the average of RIM, Nokia, HP and Apple. * Nokia wouldn't dump Symbian&Meego for someone else's OS. * Android wouldn't do a great deal better than Windows Mobile * Android vendors wouldn't be profitable So not very good really, in fact a total blowout. Maybe he knows stuff about Apple, to be honest I think he's just like a sports fan during a season when his team is playing well. His elaborate theories of why they are succeeding don't seem to mesh with reality much, except in that Apple is doing very well, and I'm not sure he cares if they do or not.

ugh 15y ago
“Nutter”? Really? Being wrong doesn’t make anyone a “nutter”.
- cooldeal 15y ago
  Maybe nutter is a strong word, but still, there is an obsession with taking numbers and 'facts' and trying to twist them into spin for Apple with dodgy long winded 'analysis/predictions' that doesn't stand five seconds of reason(except from the big Apple fanbase), all the while still trying to sound objective...
barista 15y ago
Besides android vendors aren't really profitable by big margins. Motorola in fact has continued losing money for past few years even after introducing android.
- cooldeal 15y ago
  >HTC announced that its first quarter 2011 profits were up by a staggering 191 per cent to $511 million from the same time last year. Revenue figures were not too shabby either, showing 174 per cent growth, meaning that profit growth outstripped revenue growth, something that is particularly desirable on any balance sheet. Do you get your news from Apple centered sites and blogs and the comments there? There seems to be an element of cognitive dissonance(or perhaps PR rhetoric?). If this was MS, there would be shouts of paid shills, but I am not going there. Edit: Samsung made a profit of 1.5 billion dollars off their phones just last quarter.
  - rsynnott 15y ago
    See here, however: http://www.intomobile.com/2011/05/02/apple-has-50-profit-share-smartphone-makers-cant-hear-haters-behind-huge-wall-cash/ http://www.intomobile.com/2011/05/02/apple-has-50-profit-sha... While HTC's profits are unquestionably growing, their profit share actually declined a bit; remember it's a very rapidly expanding industry. Motorola Mobility, SE and LG are loss-making or close to it. Only Samsung is in a really strong position.
    - cooldeal 15y ago
      You think that's enough to support the following statement? >Besides android vendors aren't really profitable by big margins
      - rsynnott 15y ago
        Samsung's profit margin is good, and HTC's acceptable (though neither are as high as Apple's), but all other major manufacturers are either loss-making or making a tiny profit margin.
recoiledsnake 15y ago
While I usually don't agree with the convoluted and twisted logic of Asymco, Gruber and Marco (they do get a lot of undeserved traction on HN thanks to its big section of Apple fans), I think this time he does have a point. It will be a tightrope walk for Google about who and how to share the longterm plans of the OS with etc.
- ellyagg 15y ago
  Undeserved traction? Isn't Apple performing outrageously well with consumers and as a company? Were they not the largest capitalized company in the world at one point recently? If Apple were not being reported on here heavily (and positively), a site devoted to the intersection of hacking and business, that would be awfully weird, no? As far as I know, developer revenue from iPhone apps still dwarfs Android. Shouldn't that be pretty interesting to a community more than partly devoted to making money off of programming? If anything, I suggest the extremely large number of Google employees who participate here swings the bias the other way. I found it exceedingly odd that--regarding a story about a company paying $12 billion to buy another company, the type of move that is normally considered incredibly risky, and the type of move which does not have a great track record in the annals of corporate history--after making it 3/4 of the way down the comment thread here on HN, there was virtually no criticism. Really? This move is a slam dunk?
  - recoiledsnake 15y ago
    I was talking about _some_ posts from sites like Asymco, Gruber's and Marco and some HN comments. I don't know how you construed it as if my comment was against general(if a little overactive) Apple coverage, which is think is well deserved since Apple is doing a lot lately. You were attacking a strawman.
amazingman 15y ago
He's making much longer-term assessments about the evolving market. You seem to be calling it a "total blowout" from the perspective of a reality that hasn't actually happened yet.
benologist 15y ago
It's just one of many, many websites that makes their money by pandering to a niche. It's tasteless, but profitable.
- cooldeal 15y ago
  >It's tasteless, but profitable. The problem is that they are bandied about as independent opinion and analysis. Gruber sells ads on his RSS feeds, which seem to cost thousands of dollars each, thanks to advertising by iOS apps. No wonder he plays to his fanbase with the pro-Apple and anti-Google/Android/MS rhetoric. He must be laughing all the way to the bank while thinking up his next 'The precisely perfect placement of the Chair at Macworld' and 'Dirty Percent' article. Also, he gets invited to Apple events, which may quickly disappear if he gets too critical(see Gizmodo).
  - ugh 15y ago
    Just because people don’t share your opinion doesn’t mean that they are purposefully lying. It’s a quite common fallacy, really.
    - cooldeal 15y ago
      "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" -Sinclair Regardless of the above quote, I do not accuse them of lying. But there's a strong elementy of hypocrisy and fanboyism, both in supporting Apple almost all the time, and screaming bloody murder and abject criticism of any moves by Apple's competitors. Do you seriously think analysis by Asymco, Gruber and Marco regarding Apple are the flawless gospel truth? The fallacy you mention would apply more to the accusations of commenters being paid MS shills, which happens all the time here on HN too.
      - GHFigs 15y ago
        accusations of commenters being paid MS shills, which happens all the time here on HN hnsearch disagrees with you.
rsynnott 15y ago
He was largely right on profitability, no?
- fpgeek 15y ago
  Not really. He forgot to consider the other set of companies making money from Android: Arms merchants like Qualcomm,TI and NVIDIA. For example, NVIDIA is pretty thrilled with all the Tegra 2 design wins they got from Android manufacturers.
  - msbarnett 15y ago
    He didn't "forget" them; the profitability of component manufacturers has no more to do with the fact that most Android licensee Phone manufacturers aren't turning much profit off the business than the profitability of shovel salesmen has to do with the fact that most gold prospectors never found anything worth selling.
    - fpgeek 15y ago
      Yes, it does. "Arms merchants" like Qualcomm, TI and NVIDIA are more than just "shovel salesmen". Among other things, they're the ones who do the first ports of Android to their chipsets. I don't remember where I read this, but they compete just as much as the phone manufacturers do to make it into "Nexus / Google Experience" devices. One of the big reasons profitability matters is because it drives future investment. To the extent that component manufacturers are making money porting Android to their components and selling the combination, they're going to keep investing, even if their downstream customers are locked in a brutal price war.

hollerith 15y ago

Google could shut down Motorola Mobility's hardware business, keeping its patents.

recoiledsnake 15y ago
Are you serious?
- hollerith 15y ago
  Yes: it would alleviate the concerns of other other Android licensees, who currently own about 45% of the smartphone market.
  - recoiledsnake 15y ago
    Sounds very unlikely. If it was that they would've have announced it by now. Or the headline would be 'Google gets joint licensing(and right to sue) for Motorola patents for $6 billion'.
    - deleted 15y ago
      [deleted]
    - hollerith 15y ago
      I think the way the courts work is that only the patent owner can sue for infringement. And recent events tend to show that Moto Mobility would not have been able to continue to sell smartphones if they had sold their patents to Google.
      - recoiledsnake 15y ago
        >I think the way the courts work is that only the patent owner can sue for infringement. I am not sure about that, companies like Intellectual Ventures/Lodsys do all kinds of manipulations. >And recent events tend to show that Moto Mobility would not have been able to continue to sell smartphones if they had sold their patents to Google. That wouldn't work like that. Google would (need to) provide patent indemnification to Android licensees like Microsoft does with their desktop Windows and mobile WP7.

joezydeco 15y ago

"Symbian was formed to be governed in a way very similar to the original Android via the Open Handset Alliance." Riiiiight. I was at an OHA company during the early Android days post-Google. OHA was created by Google to make their subcontractors look like "partners" in Android development. There was no boss other than Google in this project.

jfoutz 15y ago

So, Verizon needs to hire some coders and get cracking? It took Apple and Google years to produce a good modern phone OS. Palm took a shot at their own os, and as near as i can tell, they're gone now. Phone manufacturers made their choice a decade ago. They picked closed, complex, developer hostile platforms. Now, it seems, that was a mistake. Phone manufacturers get to fund Apple, Google, or Microsoft's, move into their markets.

Herring 15y ago

Unimportant. The patent problem needs to be solved Right Now, and it's worth risking a long term complication.

sudonim 15y ago

"The supplier is also a competitor" Wasn't there an article recently about how Samsung supplies a large chunk of the components in the iPhone? It's a different department but isn't it the same dilemma?