This morning, Google made a bold move and purchased Motorola’s mobile business for $12.5 billion. In doing so, Google brought the hardware design and manufacturing of Android devices in-house, just as Apple has always done with its products, starting with the original Macintosh and continuing all the way to the iPhones and iPads of today.
This is nothing short of a capitulation. By purchasing a smartphone maker, Google has all but admitted that it needs more than just a free operating system and loads of partners to compete with Apple: they need to duplicate Apple’s successes by totally controlling both the hardware and software of their devices.
It’s not just Google that has come to this conclusion. Microsoft recognized the same thing earlier this year when they partnered with Nokia to make handsets designed from the ground up for Windows Phone 7. And HP — long a company that has slapped other companies’ operating systems on their machines — purchased Palm for its webOS mobile operating system last year.
Noticing a pattern? For years, Apple was the odd duck out while Microsoft sold a flavor of Windows for every gadget that would run it. Apple was laughed at, while people like Michael Dell suggested that Apple should either switch to Windows or fold up shop.
Who’s laughing now? Apple is the second most valuable company on Earth, with a cash hoard of over $70 billion. The dominance of Apple’s products, its software and its digital media and app empire is completely unparalleled. Apple controls the world’s largest app store and make thirty cents off every dollar on millions of transactions a day.
How’d Apple do it? By never taking a short cut. By never compromising on Steve Jobs’ vision of what computers should be: a pure amalgam of software and hardware into a single, magical product. Apple’s competitors made some short-term gains by only building their own hardware, or their own software, then outsourcing the rest, but Apple’s strategy was a long tail one… and now that tail is growing at an explosive rate.
Look at the tech landscape right now, and Apple dominates every corner of it. Apple builds and sells the most popular smartphone on Earth. Meanwhile, a year and a half after its debut, the iPad is the tablet market. iOS is the second most popular mobile platform on the planet, despite the fact that it’s only available to run on Apple’s own products. Then there’s the Mac, which continues to grow even as the PC and Notebook categories shrink. Meanwhile, across the board, Apple is realizing unheard of profit margins on gadgets so finely built that the competition can’t even come close to matching their quality at the price… this despite the so-called Apple Tax.
Google may control the most popular mobile platform on Earth in Android, but Apple’s making far more off of iOS with just a few devices than the search giant is with its army of Android licensees. The iOS App Store may be a walled garden, but it is dense with a luscious, self-sustaining ecosystem; comparatively, the Android Marketplace is a desert in which a few assorted cacti thrive.
Now that Google has bought Motorola, it’s time to take stock of the situation: after thirty years, the computer industry has recognized what Apple has known all along. To be the best, to build the best, you need to control every aspect of your products. A smartphone, a computer, a tablet… it’s not enough for these things to be just a bunch of off-the-shelf components smashed together. A gadget need to be designed from the ground up to be whole.
Google, of course, isn’t just taking control of Android’s hardware destiny by purchasing Motorola. They are also protecting Android from litigation by picking up a portfolio of thousands of patents. Even so, it’s hard not to think that the purchase represents the end of an era of sub-par gadgets that have been designed by committee… and the beginning of the future Apple’s envisioned all along.