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Job cuts renew fears that Motorola's patents matter most to Google

Matt Hamblen | Aug. 14, 2012
Google's decision to cut 20% of the workers from its Motorola Mobility unit re-ignited fears that Google was primarily after the 17,000 patents Motorola held when it was acquired in May.

Kagan added: "Either way, this is not the end. I see Google cutting more [Motorola jobs] as time goes by."

Carolina Milanesi, an analyst at Gartner, said Monday's job cuts don't necessarily point to Google dropping workers and just keeping the patents. "We will have to wait and see about that," she said.

Certainly, she added, the job cuts would suggest a narrowing of Motorola's focus, and fewer devices with broader appeal and more importantly devices that will deliver the Google experience."

More than the hardware itself, Milanesi said Google is "about the ecosystem and enhancing the overall experience around Google services ... Making money out of the hardware is a game that only very few can succeed at nowadays."

With Samsung and Apple controlling more than half of the smartphone market, there is going to be more and more consolidation that puts pressure on Motorola and others to adjust,analysts noted.

Jack Gold, an analyst at J. Gold Associates, said that while Google always wanted the Motorola patents, it also wanted the company's workers because of their phone expertise and engineering capabilities.

"Since Motorola's market share is falling, especially overseas, it's likely that this type of reduction would have happened regardless if Google was in charge," Gold said.

"I don't think this is the end of Motorola, but I do expect a scaled-back presence with fewer phone models and a heavy concentration on the higher end of the market," Gold said. " Just like Nokia and RIM, Motorola is being forced to concentrate on its core growth areas and not compete at the low end where it can't win."

 

 

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