Falling $ 10 billion from Google or making blood cuts yourself to stop Samsung? - Photo 1.

Falling Google $ 10 billion or making "blood cut" yourself to stop Samsung?


On August 15, 2011, Google bought Motorola at a price of $ 12.5 billion. In the name of a subsidiary, Motorola subsequently launched a number of electronic devices and introduced them to the market. However, no product brings success to Google. In early 2014, Google resold Motorola's mobile division to Lenovo for $ 2.9 billion. At first glance, this is a trade with a loss of nearly 10 billion USD.

But please drill. Before evaluating based on numbers and data, remember who Google is. The world's top technology company, with a team of consultants and a host of top experts, can make such a mistake. At that time, in 2011, Google positioned itself as one of the most prominent names in the mobile phone market, although it did not actually own any hardware manufacturing company.

In fact, the sale and purchase agreement is "a two-bird hit".

Falling $ 10 billion from Google or making blood cuts yourself to stop Samsung? - Photo 2.
Falling $ 10 billion from Google or making blood cuts yourself to stop Samsung? - Photo 3.

First, Google acquired a series of patents owned by Motorola. Second, this giant makes the big smartphone manufacturers, using other Android operating systems, see in this game, who is the boss.

Share in an interview with Forbes in 2014, Don Harrison, head of Google's mergers and acquisitions affirmed that buying Motorola was a "successful" deal. Specifically, Google spent $ 12.5 billion to buy all of Motorola's assets. However, of these there are about 3 billion USD of Motorola cash reserves. The acquisition also allowed Google to be exempted from US $ 1 billion in taxes by the US government in 2011. In 2012, Google sold Motorola Home, a set-top box division, for Arris for $ 2. 35 billion USD. Then Google resold the handset division for $ 3 billion.

In short, Google lost about $ 3 billion, not nearly $ 10 billion initially. But not yet. This number is in fact the purchase price of Motorola's patent assets. At the time of the transaction, this was a bargain because Microsoft and Apple had previously cooperated to buy Nortel patents for about $ 4.5 billion. And if placed on a scale table, Motorola's patent portfolio is clearly richer and better.

Experts even estimate Motorola's patents worth about $ 5.5 billion, not to mention the value of the company's advanced laboratories and research, but Google is fully entitled.

Falling $ 10 billion from Google or making blood cuts yourself to stop Samsung? - Photo 4.
Falling $ 10 billion from Google or making blood cuts yourself to stop Samsung? - Photo 5.

Now, look at the second goal, which involves a lot of companies from Korea.

In 2011, Samsung was positioned as a giant corporation. The company has 427,000 employees, with annual revenues exceeding US $ 270 billion. Total assets worth $ 600 billion, spread over 80 business units. Nominally, Samsung and Google seem to be the best partners and partners, holding together and consolidating 81% of the Android OS smartphone market.

But the problem is that Samsung began to show its greed and wanted to take over. In order to become the largest manufacturer of phones and tablets, Samsung needs to conceal Android, reducing Google's influence and achievements on its own products. The company did this by using TouchWiz, a proprietary interface that allows painting all the basic aspects of Android, making it impossible for users to recognize Google products. At that time, in the eyes of ordinary consumers, they would buy "a Samsung device" and not recognize any role of Google on it.

Then things get worse. Samsung began to reduce the performance of Android by converting most software, from phone dialers, calendars, email applications, contacts, notification centers, music and video players, voice controls … into its own applications. Of course, these applications are of poor quality and waste device capacity, making users negative reviews.

Samsung doesn't stop there. The company put TouchWiz on its SmartTV line, a new market and started building it up under the name Tizen, to make it an Android rival. At this point, Google is forced to act.

Falling $ 10 billion from Google or making blood cuts yourself to stop Samsung? - Photo 6.
Falling $ 10 billion from Google or making blood cuts yourself to stop Samsung? - Photo 7.

On foreign affairs, Google claims to have more than 20,000 patents on mobile devices and publicly announced that the acquisition will not affect the relationship with their phone manufacturing partners. including Samsung. This notice is very sincere, open and well-intentioned.

Of course, Google did not expect partners to trust fully in this. What they want is the reaction of other companies before the deal that they just made. Because of this platform, Google can use Motorola to make a springboard, promote its own mobile phone business and monopolize the market. Because compared to other Android phones on the market, Google has the advantage of not having to buy the operating system as well as enhancing the ability to use the service or advertising.

Falling $ 10 billion from Google or making blood cuts yourself to stop Samsung? - Photo 8.

Although there is no need to speak out bluntly, Google also goes over and opens its cards. Other phone manufacturers then had only two options. One, look at Google wiping out handheld devices that run another Android operating system or two, obediently use it then pay for it and stop messing with Android. The accompanying moves such as increased production of Nexus phones, co-produced products with an OEM partner or the introduction of Motorola Moto X and Motorola Moto G, have demonstrated the capabilities as well as what Google can do it.

Almost no choice, Samsung was forced to humble. On January 27, 2014, Google and Samsung signed a global patent agreement over a decade-long period. Behind the deal, Samsung will adjust TouchWiz, focus on core Android applications and not use tricks to squeeze the interface and performance of Android.

The head of Google's copyright group shared then: "By working together in an agreement like this, companies can reduce their ability to take each other to court and instead focus on creativity.".

Reaching his goal, two days later, Google announced selling Motorola's mobile phone parts to Lenovo. This indicates that both signed agreements have been implemented in parallel.

Falling $ 10 billion from Google or making blood cuts yourself to stop Samsung? - Photo 9.

At the same time, Samsung received two blows. First, despite the large scale and market share in the mobile market, Samsung still has to stand in line. Korean companies will no longer have the opportunity to pinch on Android design, remove and replace with their applications. Secondly, the ambition to create a new alternative Android Tizen platform on devices like smart TVs and wearable devices is also completely removed. Because when Android becomes popular on Samsung handheld devices in the future, it needs to be seamlessly converted to other devices of the company. Tizen's newly opened door also collapsed right there.

As for users, all is good news. Their phones are used, even from any manufacturer, can easily update and experience the latest Android versions, making the device work faster and smoother. Some people may regret Google because of the "loss" trade deal with Motorola, but few understand that this is a "legendary mistake", calculated by the world's leading technology group. Every little bit without a bit of loss for yourself.

Refer Forbes, BGR


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