Much of this week has been spent in meetings talking about contingency plans surrounding the market-changing Google acquisition of Motorola. The other licensees are in massive mitigation mode looking for alternatives to Android because they generally refuse to license a key technology from a competitor, but there is an increasing belief that this could result in a much better competitor to Apple in about two years. However, what happens in the interim is looking really interesting because HP's WebOS, RIM's QNX and Microsoft's Windows Phone platform are under greater consideration all of a sudden.
Be aware that perceptions, like the U.S. stock market, are fluid at the moment and nothing is set in concrete, but let's look at what has changed as a result of Google's move.
Googorola = Apple Clone
Earlier this week, I talked about how unlikely this merger is to be successful. Now, we are going to assume success and talk about the results. This doesn't mean that I think it will be successful, mergers like the one Google is starting are inherently difficult. Initially, Google is going to try and have it both ways, which will extend the painful integration cycle and lower the probability of success.
Googorola looks very much like Apple - highly integrated and it could fix one of the painful problems that has emerged from the Android experiment: the lack of a cohesive hardware/software strategy, which has resulted in a lot of breakage and has largely contributed to the lack of success in tablets. In effect, you have an Apple-like result where hardware and software can develop on more parallel paths, creating the opportunity for faster advancement much like Apple has demonstrated.
It is also believed that Google will move to make this hardware free, or at least free of initial purchase, generally funded by a combination of subsidies from the carriers and advertising. Android tablets will go down a similar path but will likely take longer to get there, as will Google's Chromebook PC replacements.
The problem now is for all of the vendors that currently license Android and aren't Motorola; they are looking at other choices.
One of the platforms in play is the WebOS. This week's rumor is that HP is in the process of spinning out its PC division and if it retains the WebOS and licenses it to that new company, it could become a player here. However, much like licensees won't license from Google if it is building phones, they won't license from the new PC company that will be created from the spinoff. Either way, HP would have to retain the platform for this to work.
The WebOS is actually better regarded than Android is and while HP isn't known as a firm that licenses its technology, the folks who run its software division are from Microsoft, which makes this a primary practice, suggesting HP could do this successfully. There are a lot of "ifs" here and I think the smart money is on WebOS going with the spinoff, making this all moot, but there is a chance HP will do this right and, if so, WebOS could go where Android currently is for firms like Samsung, LG, HTC and others. And HP has a massive patent portfolio and it is cross-licensed with both Apple and Microsoft (and it hates Oracle) and it could indemnify licensees. You may recall that it was one of a small number of firms that indemnified Linux licensees during the SCO years and, given the heavy litigation cost, might actually be preferred over Google by a significant margin.
One additional thought is that the new PC company that is created from the HP spinoff could be called Compaq.
RIM - QNX
Consensus is that RIM is failing, but that its new QNX platform is very interesting. However, in this case, licensing QNX isn't something that can be licensed as long as it is part of RIM. RIM will need to raise money or be sold if it is to continue to operate given it is trending to fail and current expectations are that, on its current path, it will file for bankruptcy within 24 months. The firm could be bought by someone like HTC, which then goes down the Apple and Google path to create the third virtually integrated vendor. It should also take at least 24 months for this to mature and begin to reach its potential and the gating factor is the purchase or spin out of QNX or an RIM merger.
Windows Phone - Windows 8
In effect, this move leaves Windows Phone as the only hardware-independent OS for phones. Unfortunately, the carriers have largely written this platform off and the OEMs wanted Microsoft to take this platform to tablets and aren't at all happy with Microsoft telling them "no." Still, this platform is getting a second look this month to see if Microsoft can better position Windows 8 as a tablet alternative. Microsoft also could decide to bite the bullet and do what it did with Zune. Given the success of Zune, this last seems unlikely.
For Microsoft to be successful here, it either has to convince the carriers that it will do what the carriers want (provide a solution they can modify) and make Windows 8 appear more attractive on tablets, or bend on Windows Phone on tablets and get the OEMs to pick it up more broadly on tablets and phones, or successfully execute an iPhone/Zune strategy. None of these paths are easy, but they all are within Microsoft's ability to execute. Currently, the number of people who believe they will execute one of these plans is virtually zero.
Wrapping Up: Massive Change
The only thing that is certain at this point is that Google's move massively changed the smartphone/tablet ecosystem, but the nature of this change is still in flux. Google is increasing its reputation as being an untrusted supplier as this move, which appears to repeat the Microsoft-Zune mistake, has made it clear to licensees that the firm can't be trusted and this will pretty much end its licensing business. But it could emerge as a stronger competitor to Apple.
In play is whom the third power player could be with HP, Microsoft, HTC and others in contention depending on what happens to QNX and RIM or the decisions that Microsoft and HP make. Looking at past moves from all three vendors, the odds don't favor any one of them making the right move, which means the one that does could have a massive advantage over the others.
To suggest the next two years will be exciting would be an understatement.