Google and Motorola are reportedly working on a new phone – the Google X Phone – according to Reuters and the WSJ.
But the new phone could be an attempt to move Android away from Samsung.
Stone House Capital Partners returned 4.1% for September, bringing its year-to-date return to 72% net. The S&P 500 is up 14.3% for the first nine months of the year. Q3 2021 hedge fund letters, conferences and more Stone House follows a value-based, long-long term and concentrated investment approach focusing on companies rather than the market Read More
Brian S. Hall, writing for Unwired View, stated that Google’s creation of a phone with Motorola’s is done with the intention of exerting more control over its Nexus smartphone brand.
Doing so would mean Google Inc (NASDAQ:GOOG) has “complete control over the development, distribution and marketing” of any device made in tandem with a company they own.
Google Inc (NASDAQ:GOOG) bought Motorola last year for $12.5bn.
Hall wrote that Google Inc (NASDAQ:GOOG) “clearly is no longer interested in working with a partner that can’t compete against the top smartphone makers in the world, Apple and Samsung,” referring to the Nexus smartphone which was built with LG.
Hall suggests that Google wants to create phones on a par with Samsung and Apple – or perhaps better, by “leveraging the latest R&D from Motorola, particularly the company’s work with multi-core processors and mobile battery technology.”
He goes on to write that Samsung takes the free Android OS, developed by Google, but offers nothing in return – and no guarantee to Google Inc (NASDAQ:GOOG) that it won’t switch over to Bing search and maps as its default. Furthermore, Hall notes that Samsung does not promote the Android brand in its advertisements, sucks out all of the profits from Android, and thus limits the appeal of the OS for other potential handset makers.
“Plainly put,” says Hall, “Samsung is a bigger threat to Google Android than Apple. The xPhone is a logical attempt to limit Samsung’s growing dominance.
“The xPhone is Google’s attempt to full-on copy the Apple ecosystem, hardware plus software plus app store, all fully controlled by one company. This has proven extremely profitable for Apple.”
At the time of writing, Google Inc (NASDAQ:GOOG)’s shares were up 1.72 percent, to $736.09.