Did Google and HP Thread WP7's Needle?

I'm on vacation this week, and I didn't intend to write a blog post. But after the sea changes in the mobile computing industry and, ironically, my extra time to ponder it, I really couldn't stay silent.

In the space of four days, Google may have effectively taken Android "private" and HP seems to have euthanized webOS in public. It's really hard to believe all of this is happening. But we can at least have a go at understanding what it means and what might, or might not, come next for Microsoft as a result.

Hello Moto
On Monday, Google announced its intention to acquire Motorola Mobility Holdings, the "baby Moto" that makes mobile handsets, tablets and even set top boxes. Google apparently did this to bulk up its patent portfolio, and thus a credible deterrent against companies suing manufacturers of Android devices for patent infringement.

All by itself, this move is astonishing. Because in an apparent move to protect and support Android licensees, Google is acquiring one of the biggest of them and in doing so has almost certainly spooked the others. More fundamentally, Google is acquiring a company that makes hardware, even though its whole pedigree, and forte, is in monetizing digital assets. The notion that Google bought a company that makes and sells physical goods, and is happy about that, seems farfetched at best.

Why did Google do the deal? Well, for one thing, It appears Microsoft was in talks with Motorola too. If Google was behind Microsoft in the patent arms race before, imagine where it would have been – and where Android would have been – if MS got Moto. Moto would have gone WP7 (their CEO had just last week announced he was open to the idea) and HTC, Samsung and LG might have been paying Microsoft more in license fees on Android than they would have had to pay to license WP7 directly. To avoid this, Google has agreed to drop a cool $12.5 billion on a company that I bet it didn't even want.

Google was caught between the proverbial rock and a hard place... or at least it was scared into thinking so. Fear isn't something we see much of from Google, and I don't think fear-based decisions tend to be good ones. Case in point: now HTC and Samsung, who are already WP7 OEMs, may feel the need to hedge their bets, by putting more chips on live tiles than little green robots.

HP: webOS Doesn't Live Here Anymore
Three days later, albeit after the market closed, HP announced that it's pulling the webOS-based TouchPad tablet off the market, and likewise webOS-based phones. That was fast! As I write this, I am still not certain which was on the market longer: HP's TouchPad or Microsoft's KIN. But whereas Redmond killed KIN to make a better play in the smartphone market by focusing on WP7, HP is killing webOS to retreat and withdraw from from that market.

HP seems to have decided to cut its losses and forfeit the whole race to Apple and Google. There is the chance that HP will try and license webOS to the Android OEMs who feel jilted by Google, and are looking for a port in the storm. But if you were one of those OEMs, would you license webOS? And would you be ready to provide the marketing it so badly needs?

Microsoft in the Catbird Seat?
For Microsoft, the timing of all this is incredible. In the next 2-3 months, Microsoft will release the "Mango" update to Windows Phone and Nokia will release its first Windows Phone handsets, running that very version of the OS. Meanwhile, in less than four weeks, Microsoft will finally unveil its Windows 8 tablet strategy, at the //build/ conference in Anaheim.

Right now, Microsoft has a smartphone OS that, in terms of features and capabilities, is comeptitive. What Microsoft needs is kick-butt tablet technology with a strategy to match, and more apps and enthusiastic OEMs for its smartphone. The //build// conference may very well give them the tablet piece. Google and HP may have just handed them the phone piece that completes the puzzle.

It's Microsoft's To Lose. But Will it Win?
Microsoft really couldn't have asked for more. The situation and timing are ideal. But that doesn't mean Microsoft will keep from tripping over its own feet. Windows Phone has horrible retail presence and uneven, underpowered marketing. Members of the Windows Phone team, foremost among them Charlie Kindle, have left the company. And while Windows 8 could be a great tablet OS, Microsoft will also need great tablet hardware out there for it to run on.

PC OEMs have not shown themselves competitive to Apple in hardware design, and one of the biggest of those OEMs, HP, has even announced that it may spin off its PC division. Microsoft has seemingly never managed, or heavily influenced, the designs its hardware partners pursue. That will need to change. At the very least, Microsoft will need to impose hardware standards for Windows tablets in the same manner as it did for Windows Phones.

Even if that happens, there's still a lot that could go wrong for Microsoft on the phone and tablet front. But after the competitor events this week, Microsoft has only itself to blame if things don't go right.

Posted by Andrew J. Brust on 08/19/2011