Wednesday, August 15, 2012

What Business are You In

When Google bought Motorola's mobile handset business I wondered what business they thought they were in. MIT Technology Review, in my opinion the industry rag from Cambridge, no longer an alumni publication, has a short piece speaking of their approach.

They state:

According to the Times report, Woodside plans to reduce the number of devices Motorola makes from the 27 it introduced last year down to just a few, and wants those devices to have super-long battery life, improved cameras, and possibly even new features such as voice recognition technology that can recognize people chatting in a room. Dugan is reportedly hiring metal scientists, acoustics engineers, and artificial intelligence experts, too. 

But whether the DARPA research model can work in the fast-evolving world of smartphones is unclear, says Chetan Sharma, a wireless analyst in Seattle. "Regina does bring in outside perspective specially related to projects that are leaps, versus incremental steps," he says. "However, this will need to be executed under the constraints of competition, time, and money." ....

Sharma says a big task will be convincing other handset makers that use Android that Google won't give Motorola preferential treatment. "The biggest challenge for them is to keep the Android ecosystem together while launching their own Google branded devices," Sharma says. "It is a tough battle to attract the ecosystem and effectively compete against them at the same time."

 The strategy seems to be:

1. Buy the company.

2. Get the IP

3. Try to make money on what is left.

4. Play with the technology.

I am again reminded of a conversation I had with Bob Galvin the then CEO of Motorola in 1985. He wanted to expand Motorola into the service business from its then position in the hardware business. The business was then then Digital Radio Network. Namely providing brick sized data handsets working on a wireless band and selling the service to companies. I assembled a team, sold several companies on the idea but soon saw that the Motorola types were hardware types, the DNA was fixed. They had no idea what a service was.

Thus when I see Google which is a simple service business spend time and money on a product company then I assume that someone has a grand service strategy or this is a really big mistake. The Android cannibalism is a real concern. The culture is different. And with all due respect, DARPA is no Huawei.

Frankly the biggest challenge is culture. The key to success is focus. I remember what happened when the RBOCS, Bell Atlantic et al, were let loose, they spent hundreds of millions on things they had no idea about. I spent a couple of years getting rid of them too. Why some brilliant minds in them also wanted to get into the movies, and lost over $100 million or so. My time at Warner made me just chuckle. Thus it will be interesting to see how this plays out. Hubris, read the Greek plays folks, the gods always have strange tricks afoot!