Should Google Go Apple Mobile Style with Moto, Microsoft Takes the Spoils

Aug 19, 2011
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Should Google Go Apple Mobile Style with Moto, Microsoft Takes the Spoils

In a lovely letter sent out to his clients this Friday, Piper Jaffray resident Apple analyst Gene Munster covered a hypothetical situation in which once Google's Motorola deal goes through, it closes off Android from all other manufacturers and takes the Apple route by being creator of both hardware and software at once, this happening inside 2012. His analysis is thus: Apple keeps the same share regardless of the hypothetical situation, but Android falls from a 43% global market share to 15% while the "Other" category, mostly comprised of Windows Phone 7, takes the spoils, jumping from 14.4% to 44.5%.

Munster continues in his hypothetical charts by showing the "Other" category continuing to grow at a decent rate after taking a tiny dip of half a point from 2013 to 2014, taking nearly 50% of the market share by 2015! on the other hand, Android begins to grow once more from 2013 to 2014 by 3 points, taking slightly less of the pie than it had all the way back 5 years before, having 21.3% market share in 2010 and 20% share in 2015.

Blackberry and Symbian appear on these charts to have continued losses through 2015 no matter the situation, the difference being Symbian going out of business should Android remain open, they having a 2% share should Android close up for Motorola exclusivity. Munster maintains the following:

"Google loses $ 4.5 billion in Android ad revenue at $ 10 per user in 2015 [in a hypothetical Motorola exclusivity situation] compared to Android’s current trajectory." - Munster of Piper Jaffray

While there are parts of the hypothetical exclusive deal with Motorola that would be lucrative for Google, the losses they would take in other parts of the equation make this a situation Munster says Google is unlikely to go for. Munster notes that it's likely that Google will keep Motorola's patents and attempt to sell their device and set-top box businesses. Munster notes:

"As a strategic move, we believe buying the entirety of Motorola for its patents was one of the few ways for Google to acquire meaningful IP without being outbid by Apple/Microsoft who have more capital to make aggressive bids to keep patents away from Google. We believe the potential for Apple/Microsoft to bid on Motorola is low given the risk that if Google bows out, Apple/Google would need to deal with breaking up the acquisition or going through with it and owning a business of which it likely wants no part." - Munster of Piper Jaffray

That's the breaks for anyone thinking Motorola would be the keeper of the Nexus, if you know what I mean, but we're certainly not going to rule out the idea that Motorola will continue to be a big player in the Android game. Big money Bionic is coming out soon!


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