Google's Smartphone Partners Are Kinda Screwed | Hacker News Reader

Google's Smartphone Partners Are Kinda Screwed

betabeat.com

18 pointsshakes6 comments

While Google stated in its blog post this morning that it plans to run Motorola as a separate business, honor existing partner agreements and avoid favoritism at all costs, this language far more about anti-trust scrutiny than future plans. “Google sees that Apple has gotten bigger than Exxon as a vertically integrated company going after the top of the smartphone and tablet market. With a Motorola purchase, they can now do some really interesting things, including subsidizing the cost of high end Android phones way, way down. No partner wants to be the one chasing the scraps of the low end mass market.”

I think Google would rather try to make something like Apple's record profits on their handsets, than try to undermine everyone else by subsidizing their own phones.

Also, a $25 discount on a $500 phone means nothing. A $25 discount on a $100 phone is quite a lot. So it makes more sense for them to subsidize the cheapest models, so more people can get them, rather than the high-end ones where it barely makes any impact anyway.

This acquisition will probably pressure Microsoft to buy Nokia, too, although I think they were already planning on doing it, but after they see what kind of sales Nokia will have with its first WP7 phones.

But Google can afford to use subsidized MotoGoogle phones as loss leader to capture nice chunk of high end market, and bank revenue on mobile ads. Then, later on down the line, they can start to look for hardware profits.

Google has consistently had a number of products simply to better the marketplace as a whole. If the nexus line proved anything, its that Google is /not/ a hardware company, nor does it know how to market itself as one. Not only that, if they undermine other carriers, they will loose marketshare and therefore loose profits. This is clearly a patent oriented purchase, not one to compete with the other manufacturers.

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