Not long ago Google acquired Motorola for $12.5 billion. Since then many have been wondering just what Google had planned for the mobile development and assembly company. Maybe the just wanted the deep patent profile, or maybe access to a manufacturer for their phones. The statement today is that Google is going to start downsizing.
Google posted an 8-k form that states they are going to lay off 20% of the Motorola staff and close one third of the mobile development companies 94 worldwide offices. Not only that, the mobile developer will have its product portfolio simplified and focused on smartphones.
Why this move?
Google is making the statement that their goal is to return Motorola to a state of profitability. After posting 14 of the last 16 quarters as unprofitable, this might be just what Motorola need. In addition to the large percentage of cuts to be made, it would appear that Google is changing the management team for Motorola as well. They removed 40% of the vice presidents and added in some new senior executives. They are cutting back on operations in Asia and India, instead focusing their research and mobile development in Chicago, Beijing, and Sunnyvale.
New Chief Executive Dennis Woodside states that they are going to cut down the number of devices that they create and develop. He wants to focus on making the companyÔÇÖs products top notch again by adding in things like voice sensors that can recognize who is in a room when they talk, higher resolution cameraÔÇÖs, and even batteries that can last for days. These ideas will be coming from a group of a few dozen people within the company that will be named Advanced Technology and Projects. Heading this group is Regina Dugan from the Defense Advanced Research Projects Agency, or Darpa. This specialist is coming in engines ready. She is hiring metal scientists, acoustics engineers, and artificial intelligence experts to get the project going. She has even borrowed a tactic from Darpa; all of these specialists will only be working for Dugan for two years.
With this new partnership underway, Competitors like Sony, HTC, and LG are getting a little nervous. All of these manufacturers use the Android OS in their phones so they are interested to see if Motorola will get special treatment from Google. In the end Google has repeated its promise that there will be no special treatment. Motorola will have an equal chance just like any other manufacturer to build a Google-brand Nexus device.┬á In the end the acquisition has proven to be equally beneficial to both Google and Motorola. Motorola needs the software specialists and Google needs some help with hardware (which chrome laptops, Google TV, and the Nexus Q have proven). Apparently Sergey Brin (GoogleÔÇÖs co-founder) called Motorola before the I/O conference to ask if his sky divers would have cellular reception a mile up in the sky.
┬áWhat I Think
I personally think that the idea of a hardware manufacturer and a software development company working together is brilliant.┬á This could be a very good thing for both companies as they move forward together. Google does need to be wary of how it treats the competition though. When looking for an Android device there are many choices when it comes to the maker. For the moment this is to GoogleÔÇÖs benefit and they should avoid anything that could hurt it. Tightening down MotorolaÔÇÖs focus and utilizing its 17,000 patents will ultimately benefit us consumers as well. I currently have a Motorola phone and love it, and will be very excited to see what new goodies they will come up with under Google. A return to its former glory would be fantastic.
GoogleÔÇÖs announcement of cutting jobs and downsizing Motorola has been met with mixed feelings. Overall the goal is to reign in the mobile developerÔÇÖs focus and focus on a few select phones rather than the large amount they were working on. They will leave behind unprofitable markets and stop making low-end devices and instead push forward with their new Advanced Technology and Projects group. This could be a great move for both companies and we will just have to wait and see how the mobile development world takes it.