

Google's Smartphone Partners Are Kinda Screwed - shakes
http://www.betabeat.com/2011/08/15/google-smartphone-partners-are-stuck-between-a-phone-and-a-hard-case/

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bproper
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.”

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nextparadigms
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.

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bproper
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.

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cleverjake
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.

