It’s been just over a year since Google Inc (NASDAQ:GOOG) decided to purchase Motorola Mobility Holdings Inc (NYSE:MMI) for $12.5 billion making it the largest acquisition in the history of Google at the time. Though the purchase of Motorola Mobility Holdings Inc (NYSE:MMI) was completed just last year, it has been two years since Google agreed to purchase the phone maker.
Google purchased the company almost entirely for its catalog of patents. They felt that these patents were worth the price as well as feeling that they were in a better position to fight Motorola’s patent disputes with Apple Inc. (NASDAQ:AAPL).
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Moto X unveiled yesterday
Yesterday saw the unveiling of the first Motorola Mobility Holdings Inc (NYSE:MMI) phone released under the control of Google, The Moto X. The Moto X was heavily pushed by Google Inc (NASDAQ:GOOG) to become its flagship phone. Motorola presently has just one percent of the smartphone market down from 3.6 percent a year ago. With this release came some unexpected surprises that shows that Google and Motorola haven’t quite figured out how to work together.
Problems already faced with the Moto X
Firstly, the Moto X is not pre-installed with the latest version of Android. It’s been made public by a number of Motorola employees that they had a great working relationship with the Android division of Google Inc (NASDAQ:GOOG) prior to the acquisition, but once the company was purchased employees say that their emails often went unanswered by Google’s Android division. Bizarre.
“It’s not like we were equally disadvantaged—we were more disadvantaged,” one former Motorola employee said.
Andy Rubin warned of perceived problems
Many blame Andy Rubin for this rift. Rubin, who recently stepped down as head of Android after eight years, is believed to have been largely opposed to the acquisition of Motorola Mobility Holdings Inc (NYSE:MMI) and warned of the perceived problems that might occur with other Android handset manufacturers if they believed that Google Inc (NASDAQ:GOOG) was cozying up to a single company.
While Mr. Rubin makes a valid point there, another reason for the acquisition of Motorola beyond its patents had to have been the ability to lean on a company that you own for its hardware experience. This becomes especially relevant if you look at Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) slowly taking over the Android market while at the same time developing a new smartphone operating of its own.
Google Glass’ manufacture may solely rely on Motorola
In addition to the Moto X, Google Inc (NASDAQ:GOOG) is already using Motorola Mobility Holdings Inc (NYSE:MMI)’s hardware experience to help it with Google Glass. In fact it’s even being suggested that some day, Glass’ manufacture may solely rely on Motorola.
“It could someday be an opportunity,” Dennis Woodside, Motorola Mobility Holdings Inc (NYSE:MMI)’s chief executive, said in a recent interview.
While a bit strange this Moto X problem, it may just be growing pains as the two begin to truly work together.