Forgive me for lack of speed; I needed to let this one roll around in my head for a few days:
Motorola is enjoying a business resurgence. Owing to their decision to start making SmartPhones based on the Google Android operating system, Motorola has become profitable after many quarters of moving in the wrong direction. Palm, on the other hand, is no more, having been acquired by Hewlett Packard for reasons that HP has thus far kept close to the vest.
This article in the New York Times compares the fate of the two companies, and I wasn’t sure what the real point of the comparison was until I gave it some thought.
Palm all but created the market for Personal Digital Assistants when they released the Palm Pilot back in 1996. Sure, there were other PDAs that came earlier, but the Palm Pilot was the first one to gain any traction. Since then, Palm has floundered, being sold a couple of times and going through a couple of business change cycles when they weren’t sure if they were a hardware company or a software company . . . and even splitting the two.
Nobody says “PDA” any more. The things that PDAs did are now done by SmartPhones.
Motorola was at one time a phone manufacturer. Of course, Motorola makes many other things, too, but they created some of the most important cell phone technologies and were the runaway leader in that market for years. And cell phones need software, which Motorola wrote themselves. And the software was . . . well, who cares? It was phone software.
Now, Motorola has hitched its wagon to the Google Android star. In short, Motorola has enacted business change by acknowledging that they’re better off concentrating on the hardware and using someone else’s (free!) software. The Verizon (Motorola / Google) Droid sold many millions of units. Motorola is back, baby!
Or are they?
I’m not a stock prognosticator, but if I was I wouldn’t be so excited about Motorola’s future chances based on their recent success in the SmartPhone market using Android. Verizon released a second Droid model last November; the HTC (Verizon / Google ) Droid Eris came out at the same time, but Verizon didn’t give it the marketing boost that Motorola’s Droid received. And now, Verizon’s Droid Incredible is on the street. It also uses Google Android. It’s also made by HTC. And Verizon has moved on; it’s the HTC Droid Incredible that’s now Verizon’s Droid Baby.
Motorola has all but remade themselves as a software company, but Google Android software is available to anyone who wants it. Companies like Verizon are marketing Android-based hardware from other companies. And Google has already shown that they have no intention of being part of this fight; their foray into the hardware and phone businesses with Nexus One was nothing more than a giant smoke screen to get companies like Motorola and Verizon to adopt Android.
And Verizon, by the way, is at is again; they’re about to release a tablet computer based on Google Android.
Don’t get too excited about the business change at Motorola; it’s going to be a short-lived success. And you do better: when planning your business change, make sure you look long-term.