Google Is Letting Motorola Die

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When Google shelled out $12.5 billion for Motorola Mobile in August 2011, the whole industry knew what the search engine company wanted, and it wasn’t to get into the smartphone business. Google wanted Motorola’s catalogue of mobile phone patents and intellectual property.

With the insane amount of litigation taking place in the smartphone space, buying Moto’s rich portfolio of patents would be the ideal way to protect the Android market and the numerous handset makers selling the phones.

But there was at least some hope that Google might do something with the Motorola lineup of phones. Perhaps use them for the Nexus line, or at least pump up the product line.

GoogarolaIt doesn’t look it. Analysts report that Google has basically gutted Motorola and is making no effort to sell phones or even spin off the handset business to someone who wants to make it work.

“Google got what they wanted out of them, the patents, and now they are almost casting them aside,” said Jack Gold, president of J.Gold Associates, a mobile marketplace research firm.

“The place has been eviscerated. There’s no one left there. They got rid of marketing and sales, they’re cutting back on manufacturing, and R&D is less than it was. I think Google is content to turn Motorola into an ODM [original design manufacturer]. Google doesn’t have the patience and will to bring Motorola back. Motorola has fallen on hard times,” he added.

Ramon Llamas, research manager for mobile phones at IDC, has heard pretty much the same. “Let’s put aside who’s in charge. In terms of devices, we’ve seen two new device so far and they are updates of the previous RAZR and RAZR Max lines. Relying on your previous model and continuously updating it only gets you so far,” he said.

IDC put Motorola’s share of the U.S. smartphone market at 2.1% in the third quarter of 2012. A year earlier, it was 3.9% and in 2007, it was 6.9%.

Neither analyst said he’s seen anything resembling a roadmap, although Llamas said he was hoping to see something at the upcoming Consumer Electronics Show. Google did not respond to requests for comment.

For now, both say all their old Motorola contacts have been replaced with Google people, and Google is not a smartphone maker. It runs a search engine.

“When I look at some of their numbers, I haven’t seen the needle move significantly from earlier this year. Other companies are growing,” said Llamas.

“I think Google either should sell them off or shut them down, but I don’t know which it’s going to be,” said Gold. “It’s all Google management at Motorola, and what do they know about running a cell phone company. And you know how fast this market is moving. How do you keep up with Samsung? It’s a very competitive landscape.”

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