Google buying Motorola for $12.5 billion, proving vertical integration is the way to go | webOS Nation
 
 

Google buying Motorola for $12.5 billion, proving vertical integration is the way to go 83

by Derek Kessler Mon, 15 Aug 2011 9:57 am EDT

Google this morning announced that they are purchasing Motorola Mobility (the recently-spun-off cellular arm of Motorola) to the tune of $12.5 billion. The purchase, expected to close around the end of the year, was explained with a few reasons, including Motorola’s loyalty to Android (they are the only major Android manufacturer that didn’t jump on the Windows Phone 7 bandwagon) and Motorola’s extensive patent portfolio (which Google claims to want as a defensive weapon). It also helps the purchase that unlike HTC, Samsung, and other Android licensees, Motorola was struggling financially, failing to replicate the blockbuster company-saving success that was the original Motorola Droid.

This purchase, though praised on the patents front by competing Android manufacturers, has to be worrying to the likes of HTC, Samsung, Sony, and LG. Google’s statement says that Motorola will continue to operate as an independent company (so why buy them?), but we can’t help but think that this proves the viability and strength of the vertically-integrated model.

Think about it: Palm and BlackBerry dominated the smartphone space for years by building their own devices and operating system. Apple came along and did the same thing with the iPhone and iOS. Android’s success runs counter to that trend – it’s a openly (mostly) licensed operating system that has grown tremendously to take the lead position. But it’s done so on the backs of hundreds of Android licensees, with no individual manufacturer seeing overwhelming success. And that’s partly because Google’s goals and the OEM’s goals are different. They’re on the same ship, but they want to steer it different ways.

Bringing Motorola into the Google fold gives Google that vertical model where they can tightly integrate software and hardware the way that they want. There’s a question facing both Google and their licensees: what comes next? Google can attempt to run things the way they did when Palm was licensing Palm OS out to companies like Sony while still making their own Palm-branded hardware. It didn’t go over well with the licensees and eventually Palm split themselves into separate hardware and software companies – a decision that ultimately led to the collapse of the company several years later (and here we are now).

The other path is to treat Motorola no differently than any other Android licensee, which makes things awkward. Any time Motorola gets a leg up on the competition – such as getting to build the next Nexus phone – the competition is guaranteed to cry foul. Which then sort of defeats the purpose of purchasing Motorola: to build the Android handsets that Google wants built. It’s the reason they’ve started clamping down on modifications to Android, and it’s the reason Microsoft has such strict design requirements for Windows Phone 7 hardware (and soon enough Windows 8): they’ve been through the era of unfettered modifications to their star products, and they’ve had enough and want to bring the user experience under control.

83 Comments

Nope, its not about vertical integration. Its for the patents. Plain Simple. The fact that Apple,Microsoft and RIM ganged up against El Goog forced them to buy Moto, which wants money for its patents from other Android makers.

motorola may have patents, but that didnt stop MS from suing them.

Isnt apple suing them too?

...ever heard the words "countersuit", and "settlement" before?

Yup,
People don't realize Motorola has patents for many things ranging from Cable modems to TV sets to cell tower technology to satellite phones.

BTW they are created "The World's First Commercial Portable Cellular Phone".

This will help Google to
1.Defend Patent lawsuits from Apple/Microsoft.
2.Counter sue them for any Motorola Patents
3.Find evidences for prior art on any disputed "features"

If anything its a killer blow on Microsoft not on Apple. Historically Apple's intentions in patent disputes were to defend its IP while Microsoft is a legit patent troll.

exactly. People are unaware, that Motorola is one of companies that have created electronics as we know it, and they have massive patent portfolio (same as was the case with failed Google attempt to acquire Nortel, with their massive portfolio in telecommunication/mobile).

If someone is reading this as Google's attempt to "integrate" Android vertically, that someone is missing, hmm, say, about 98% of a broad picture.

Android has have dominated smartphone market by doing exactly the opposite to vertical integration, and I doubt that backing up from the strategy that made their market share in mobile OS skyrocket, is high on elGoog priority lists.

That is not that I say that vertical integration is a bad thing by itself. Doesn't hurt Apple, apparently. Just the HPalm execution of it stinks, and reading into today's acquisition announcement as a "proof" of "vertical integration" being a one and only true way to go... really lacks the big picture

I would add,

Nortel and Motorola both were in communications business (creating telephone exchange equipment,wireless networking). I bet this angle will help Google.

This is what the aggressive defense Google deployed when their legal counsel David Drummond said they would do everything to defend Android.

If it was just for the patents, there would've been other, cheaper, options.

...like, for example, Nortel? Or like, for example, who else?

It's not just for patents. Motorola does this with almost every one of their spin-offs. They start a new department on the coat-tails of some booming success, and the managers are promoted to corporate and things are happy. The next group of managers moves in, guts the engineering and design departments to reap higher profits (on paper) and also get promoted, the third round comes in with NOTHING in the pipeline and are FUBAR. They straggle along with failure after failure, as they're now playing catch-up to their own technology. Finally, they gut the place(s) and offer it up for sale, or take offers at inflated prices for their 'technology', and then later sell off all the old 'capital investment' at a loss - double win.

They've done this multiple times with moto gov't, moto micro computer group, etc. It keeps each department fresh, and they build new technology each time around. It's also why they only seem to have commercial success in one fashion or another every 5-10 years, hence all the various departments.

Google will buy them up, specify what they want in their line-up, and then outsource designs to other companies to flesh-out and build the actual hardware. Even if it has 'moto' on it, I'm betting HTC or others will still be the ones who own the models and molds and all the mfg contracts.

...sure, Precentral!

It is too funny how you tend to drink & swallow every word coming out of HP's corporate mouth, and regard it as a "fact" - even if being a plain nonsense. Yet all the same, when Google buys Moto (and clearly, it is them waking up late to the "patent wars" call to arms, plain and simple), you see another dimension to it, and a "proof" that HP/Palm way of doing things is a way to go.

I am only trying to figure out, how your stomach will feel for umpteenth time, when you'll have to eat your words about the awesomeness and appropriateness of "vertical integration" when HP starts licensing webOS to the likes of Samsung in months time (at most) :)

I am just wondering: are you guys writing this kind of nonsense articles on a purpose, to draw everyone's attention away from the fact how big & bold moves HP's competition in mobile market is constantly making, how REAL COMMITMENT in this space looks like, and how aggresive and bold you have to be to stand a chance against this determined opponents?

Compare this kind of multi-billion aquisitions that are made just to support and counter-atack the biggest threats for their ecosystem, or gain critical advantage over competition (like MS buying Skype), to these feeble jokes of a "commitement", that are known in webOS circles as a "soft launch", or the lack of ANY communications with any stakeholders (users/tech community/developers) about what lies ahead for webOS software/hardware, if you please, all the funny folks here, being soo adamant about how "committed" HP is to webOS, versus other "marathon" participants.

It would definitely be a mistake for HP to license out webOS without setting strict standards. Based on their PC, laptop and printer sales, one would think HP is big enough and smart enough to make their own webOS hardware without assistance (read: interference) from other vendors. (So where in the **** is the Pre 3 anyway??)

"(...)one would think HP is big enough and smart enough to make their own webOS hardware (...)"
...sure, that is apparently what they were thinking at HP: what's the difference between trying to create & sustain mobile OS ecosystem, and selling smartphones, versus selling printers or servers? You just creat booth everywhere using your "scale", slap some 80% margin on top of your manufacturing costs, and start counting the cash, because "we have such a cool product".

Turns out, there are some crucial differences, that they haven't got a clue about :). Like, them actually never before being in a game of sellin OPERATING SYSTEM, working with DEVELOPERS, providing them with APIs, COMMUNICATING with them and tech industry about why it is sooo cool to be with webOS... Things that nearly all of their competitors do routinely, or sort of (sort of- google only attempts for the first time to develop $ "sell" OS, but clearly they have a lot of experience with developer relations).

"it would definitely be a mistake for HP to license out webOS without setting strict standards"
I don't know or care too much about them setting "standards", but you must have not been paying attention when Leo "The Marathon Bloke" Apotheker has been hinting heavily about Samsung being in talks as a potential webOS licensee.

Actually, I have been paying attention. And you're underestimating HP's size and depth of services. They're not just into consumer products. Whatever expertise they're missing they can replace with something called a "job posting". Everyone had given up on the Boston Red Sox, but they eventually pulled out of their slump and won the World Series. Likewise, if HP studies the competition and stays humble, they can do the same. I'm so psyched by many (but not all) of HP's latest moves, I've started really pushing webOS products to my friends and family again (I was so disgusted, I had given up). NO MORE PESSIMISM. All we need are some new phones (preferrably running 3.0) and we'll be kickin' butt!

....oh,I see, you are referring to so-called "potential"? And to what they "can"do? K, that's the difference between us - I couldn't really care less about that stuff, only about what they actually ARE doing , which unfortunately, doesn't paint a rosy piicture

HP has been in the game of selling OS since HP/Ux. Also there was competitor Tru64 Unix, which thrived since the early 90s by Digital and even Compaq who bought Digital. HP bought Compaq and now Tru64 is defunct and HP/Ux has made no gains. So, HP does have plenty of experience doing something with operating systems.

"So, HP does have plenty of experience doing SOMETHING with operating systems."
...by reading your previous paragraph, it seems that this SOMETHING you mention, is BUYING operating systems, as scraps after dying IT companies, and then making sure to drive last nails into their coffins. Hmm, that sounds similar to Palm/webOS story, now you said that...

All these systems were on the market, I know that exactly. I do not exactly remember them having any significant importance broadly, nor I do remember them succeeding against competition. And all of them were NOT addressed to a broad public, which makes them completely different in every regard to develop, communicate to it's potential stakeholders, marketing, etc, etc, etc... Which kinda summarizes my point, that HP doesn't have experience in this field.

wow - I'm surprised this didn't get removed. If this was in a forum thread, no way does it stick around. I have seen way less flames disappear in a matter of seconds of it posting.

with that said, well put. Again, just amazed this is still out here

...but that is just the reality, plain and simple, and true, I am being annoyed by all the bias and unrealistic view of the webOS situation here & at HP (and it shows in my writing), but there's no denial to the reality, even if pout in a harsh way.

well I am only HOPING that some ppl from HP are actually reading these posts from here, and make some notes on their napkins.

Maybe it is just a coincidence, but recent price slashes on TP and still unreleased Pre 3 (versus previous leaks) / Veer in Europe, seem like they are coming to their senses. And maybe some harsh comments from their community have something to do with that. And maybe it is because of that, that P|C keeps them comments on the main page, while still being a propaganda tube themselves.

I dunno.

How is this a nonsense article? Seems that a lot of tech sites are thinking the same thing. Are you going to go out and hit up each one of them to counter their arguments also, or is PreCentral the only destination for your opinion?

It's logical for Google to purchase Motorola for their patents, given the patent war that Microsoft and Apple have started and are profiting from. However, it still puts Google in the awkward position of making it's own software and hardware. If I were an Android hardware maker I would be concerned also. This acquisition gives the new Motorola division an upper hand on everyone else because they are in bed with the same folks who make the software. Larry Page has said that Motorola will be ran as a separate division but I bet that doesn't help ease any fears. If I were the CEO of HTC or Samsung I would also applaud this publicly but voice my concerns very loudly privately. Also, you can't argue with history, only learn from it (hopefully). Palm never recovered from pulling the same stunt. Why do you think HP is very tight lipped about licensing webOS to other manufacturers? They have to make sure that they are not competing in the same space as the company they are licensing to. It's going to happen but it has to be done right or history will repeat itself.

First, lets compare apples to apples, and not troubled hw/software shop that Palm was at the time with Google.
secondly, Google's whole philosophy & culture is about Open Source etc. They will not change their philosophy in this regard &what makes you think otherwise?

I'm not sure why you're surprised anymore. It's par for the course at Precentral. Kevin needs to clean house a bit here.

Time to look elsewhere. Even Dieter knew that.

Android became the top platform without vertical integration, while Palm has enjoyed vertical integration for 2+ years with WebOS and has dwindled. I don't see how any of this "proves vertical integration is the way to go."

I'm love to see more thoughtful, honest analysis from P|C rather than the "Ra, ra, ra, Go HP!" we've gotten lately.

I don't like the way you put it, but I must agree, it is about patents, after I looked at the numbers. $12.5 billion for 17000 patents is about the same rate of the $4.5 B the others paid for Nortel's 6000 patents. So, for the similar price, not only Google got the patents, but some talents and asset. Not a bad deal for Google.

The question now is how serious is Google about making phones. I don't think it would be good PR just to kill Moto phones. But on the other hand, how would the other phone makers think about this? I don't see how they can do it half way, not fully integrating Moto, yet help Moto to make better Android phones. The end result would be either slow death for Moto phones or complete integration and try to create great phone (and piss off other phone makers).

Well, honestly, Motorola smartphones are a big deal in the US, but nowhere else...

Hmmmmm ... perhaps licensing Beats to HTC was not an out of the ozone decision.

Could this be an indicator of future H/W development for HP?

Just wondering ...

Beats me.

LOL

My thoughts exactly. Said as much last week when it was announced. You think that mystery Slab phone was a fluke. After the IP5 announcement we may hear a joint HPalm HTC event to show off the new member to the TP family. the TP Emerald. A 4in Slab of goodness with WebOS3 and Beats audio. Oh if that was true.:D

I think that might be very reasonable given Palm and now HP's refusal to make a smartphone without a keyboard. If HTC or Samsung made just a webOS slab, HP could remain the sole maker of portrait sliders. HP could market them as professional phones and sell to a smaller, yet dedicated, market. HP makes money off the app store regardless of who makes the hardware so it's a win win situation for them. Plus the more hardware that's out there the more enticing it is to developers.

"HP could market them as professional phones and sell to a smaller, yet dedicated, market"

...if they manage to supersede Blackberry as a de-facto professional smartphone of choice (less & less likely, with every passing month without Pre 3 and accompanying enterprise-class services & integration), I do not think that market is "smaller", not at all...

http://forums.precentral.net/webos-discussion/272447-curious-future-thou...

no need to call me Nostradamus . . . but that's 3 for 3 ;)

sweet! we're planning on vacationing at the caribbean during the hurricane season, can you tell me which dates are good??

Now if only HP could buy HTC..that would be awesome.

Or Samsung?

HTC maybe...Samsung I very much doubt that HP has that kind of money to do so. Samsung don't just produce phones but other electronics too.

well, google didn't buy the entire motorola company...just motorola mobility. i suppose that's what hpsalesguy meant, just the mobile division of samsung.

..last time I checked, mobile division of Samsung was doing little bit better than webOS Global Business Unit, and was not on sale.

Seeing that Samsung's mobile unit has been around longer and has a boatload more products they should be doing better. I think HP realizes this and may use Samsung as webOS licensee.

Actually, Motorola Mobility is a separate company. They were split off from Motorola proper several months back.

hahahahahahaha! HP buying Samsung, funniest thing I've read here in a good while!

...wkae up, hpsalesguy, maybe the other way around, in few years time - much more likely!

I'm not sure if you are joking or not but based on the size, scale and revenue of HP vs Samsung, I sure hope you are. Samsung and even HTC for that matter aren't anywhere in the ballpark of the size of HP.

Actually HTC seems like a much better acquisition target than Samsung. Not much larger than Palm, HTC was originally an OEM which has worked with a variety of phone OS makers, including Palm. They make kickass phones and the OS tweaks they've made with Android have been more thoughtful than those of Motorola or Samsung. They would make an excellent hardware arm for an expanded webOS Global Business Unit or whatever HP is calling Palm this week. Throw in Sprint or a strong regional carrier like US Cellular and HP would get a chance to test this vertical integration theory in earnest.

...as someone here rightly put it before, take a look at HP's profit margins, not just the size/revenue, and dramatically different picture emerges.
Now just wait few more years (especially, just you wait until people&companies start to abandon paper printing by hundred of millions a year), and we will see :)

I doubt paper printing is going anywhere anytime soon. HP makes billions a year off my "company" alone. We went digital with our most of records and manuals years ago yet we are still wiping out a whole rain forest worth of paper a year. Most of our printers are HP LaserJets. We do use printers and copiers from other companys but wow do we burn through a lot of paper and ink.

paper printing is just the icing of the cake. Take another look at their profitability, as I said, and start thinking hard...

It's for the patents, not about vertical integration. But it might make WebOS attractive to possible licensors, if HP would want to license it at some point.

agreed. with motorola now sleeping with android, i'm sure HTC and Samsung will start looking at other OSes. although that android price point is unbeatable.

Aren't they already dancing with WP7?

Neither HTC nor Samsung are a one OS type of company.

Google is an advertising company. They want Android on as many units worldwide as they can muster. Google could easily throttle back handheld units if it pleases their "competitors" and encourages them to expand their droid usage. Google has sold hardware in limited ways, always careful not to start a firefight with the real droid using heavies.

google will sell or spin off the hardware business. There is no way they can keep such a low margin business.

this validates the patent suits google is facing, not the need for vertical integration...

motorola already has licensing seals with apple and microsoft, so their suits become moot after this acquisition.

How is it a low margin business when HTC has record profits and Samsung's mobile division is exploding?

"with no individual manufacturer seeing overwhelming success."

http://www.reuters.com/article/2011/04/08/us-htc-idUSTRE7371GE20110408

We really seem to be looking at HP's place in the smartphone world with rosy glasses, eh?

This also could boost their GoogleTV prospects which I'm sure is on Apple's suing radar.

Of course if they really wanted to protect GoogleTV, they would buy TiVo which after all these years still makes the best set tops.

Patents. That's the long and short of it. Google felt pressured by Apple, Microsoft and other so their new CEO reaches into his corporate wallet and buys Motorola Mobility to solve the problem.

Problem solved, problem created. The already upset Android licensees who cannot differentiate their devices go from Google playing favorites at OS launch to Google owning a competitor. Now they have two things to be upset about. Google's answer on this morning's call is that they'll run Motorola as a separate company. That doesn't take away the fact that they're still a competitor and they're owned by Google and their Billions in cash. Where competition could have taken them out over time now they're in the game and bulletproof.

What else could Google have done? License the disputed technology. Companies do it all of the time. Apple licenses Exchange Active Sync from Microsoft so even 'enemies' can and do license their technology. The patent game is about money that's why you have shell companies buying patents and hiring lawyers to extort money from tech companies. Android as a platform is a loss leader - they have a large staff developing a platform that they give away to manufacturers. This is all an effort to sell ads and gather information about users to sell to advertisers. Licensing technology only makes the cost a little higher. If the ad game is so wildly profitable Google can just license the technology and move on. Now, they have a bigger problem with their licensees and handed them right over to Microsoft.

So, does anyone still believe that Google is:

1) smarter than everyone else
2) somehow not evil

Larry Page may be a terrific technologist, but he's a terrible strategist.

...only that ALL main Android OEMs have already applauded the move, from their CEOs mouths, as one, so I cannot see it backfiring at elGoog.

Yeah, that's what Larry Page said during the press conference so I guess it's true. Only he failed to mention the name of the OEM CEO. And all other difficult questions received a non-answer too. If this deal was such a winner then why is Google stock down while the broader market is up?

Everyone smiles for the peasants while secretly sharpening their knives to take a run at the king once the tournament is over.

Like you wouldn't publicly have nice things to say about a company that provides the software and services you are profiting from? I bet there was some private scorning that we are not privy to. Would explain why Larry Page was so eager to say that Motorola would be ran as a separate division and that their relationship with their partners would be the same.

"As One" huh... That in itself tells me enough. Read those comments carefully. This is a "shotgun" ceremony for the other OEM's. They are competitors, not golfing buddies.

A LOUD AND BOISTEROUS +1

Of course they are going to say nice nice to Google. What else can they do. What we hear is the good pc commitment for now. In the conference rooms people are scrambling. Another shoe or two is going to drop soon cause of this. What it is i'm not sure. But there are more H Bombs coming.

Two points;
1. This isn't about vertical integration, it's about the patents. Even if it was about vertical integration, HP has yet to validate that strategy and Google with it's 550,000 device activation a day seems to be an overwhelming body of evidence that these devices are about the ecosystem not the manufacturer owning the OS. Just because it might "look" like vertical integration doesn't mean it is anything at all similar to HP's strategy. Google will continue to license Android.

2. The CEOs will see this for what it is; an opportunity to continue to build Highly Profitable Android devices without the pressure of Apple or MS lawsuits. Google is going to extend the patent portfolio to cover the manufactures. As such, I would expect that HTC stops paying MS $5 a phone reasonably soon. MS also has no chance of getting Samsung to give them the $15 per phone they were looking for if Samsung has Moto's (now Google's) patents behind them. So not only is this a chance to defend it's partners, it's a chance to take money out of it's competitors hands. That's not evil, that's good business.

Google still needs to deal with Oracle, but they are on a much stronger footing against Apple and MS now and I can see how the other hardware vendors would applaud this move.

The part that hasn't been discussed is that with Moto's shaky financials, this would be a whole different conversation (and possibly the death of Android) if Apple or MS had stepped in to buy them. Google couldn't let that happen as either of those competitors armed with Moto's portfolio would have been able to extract a heavy licensing toll on Samsung, HTC, LG, or anyone else building Android.

I bet this is a move to try and have more control over hardware to try and stop the crazy marketshare they have been bleeding to WebOS.

Google can try this, but the Veer and Pre3 have been selling like crazy and I will not be surprised if they pass Google in users the next year!

Go HP and Go WebOS! #1 double-plus!

haha, you had to going for minute there :)

Only thing funny I've ever heard Glenn Beck say!

Interesting part of the deal to me: if Google walks away before closing, they pay Motorola $2.5B, 20% of the deal. If MMI walks away from the deal, they pay Google $375M or 3% of the deal.

Also, transaction ($12.5B) is all cash.

HTC, Samsung, and other OEM partners supportive of Motorola Mobility acquisition, praise Google's defense of Android

http://www.androidcentral.com/oem-partners-supportive-acquisition-glad-s...

"Peter Chou, CEO, HTC:

“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”

Bert Nordberg, President & CEO, Sony Ericsson:

“I welcome Google‘s commitment to defending Android and its partners.”

Jong-Seok Park, Ph.D, President & CEO, LG Electronics Mobile Communications Company:

“We welcome Google‘s commitment to defending Android and its partners.”

J.K. Shin, President, Samsung, Mobile Communications Division:

"We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.""

Missing is the part where each CEO turns around and says, "OK, I did what you wanted. You can put the gun down."

...maybe because that is just the imaginary part?

Did y'all see the press conference where Google CEO Larry Page said: "We didn't buy Motorola Mobility to be in the smartphone business"?

LOL times ten thousand! ! ! ! ! I bet we will see this conference "in the coming months"

Ok, I really didn't see that coming. Well played.

Derek:

"Google’s statement says that Motorola will continue to operate as an independent company (so why buy them?)"

that alone i don't think is dispositive. Warren Buffets companies ae all independent companies. That said, Warren Buffet rarely buys struggling companies. He buys well run companies with, clockwork consistent earnings growth, with great managment. Or great businesses that merely need the right management. But not sure motorola would fit that mold since it's been struggling to get profitable. Regardless point is taking over and running a company is not always the goal as evidenced by the actions of warren buffet.

another reason to have motorola is for their set top boxes to integrate Google tv and get it into every home with cable tv. Those boxes from the cable company are often Motorola. I've had a motorola box, with three cable companies in three cities over 11 years.

Berkshire Hathaway doesn't have any products of its own. Google does.

this.is.wild

Hp needs to put out some damn phones already a company worth over 217 billion dollars should have there s h i t together already.Come on already HTC is only worth 34 billion and sure phones is what they do but with the money behind hp stuff should be coming faster just drop the pre 3 in the usa and release what ever you have next like a phone similar in design to the droid 3 bigger screen and keyboard and duel core

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Yeah, the ascertions in this post are just completely wrong.

There is no way Google is going to rip up the Open Handset Alliance just so it can vertically integrate - this is not the model for Android that Google has pursued all these years. For them it's all about getting Android into as make folks hands as they can, via a diverse choice of handsets - not about Apple style vertical integration and a closed ecosystem.

Google makes no money from hardware or from the Android platform itself - it's all long tail on search and about Google reaping the advertising dollars of Android users.

They have purchased Motorola simply for the Patent portfolio, which they will use to extend defences to their partners where they can. I'd be amazed if they did anything to upset their partners.

What does this means for HP? Well nothing, webOS is nowhere - that's why nobody is suing HP, they're irrelevant right now.

The only thing for sure is, if HP was ever serious about licencing webOS then this is most very definitely the time!

I actually doubt very much that Samsung would seriously walk away from Android given they are now very close to being the No 1 smartphone manufacturer on the back of it - but licencing webOS would at least give them some additional leverage with Google.

For those of you ripping Derek about his "vertical integration" comment/claim & saying it is only about the patents, may want to read this article from the Wall St Journal. It says you are both correct, but one quote from the middle of the article says:

"Vertical integration is clearly the business model of the day," Gartner Inc. analyst Van Baker said.

So some business analysts do agree w/Derek. Here is the article:

http://online.wsj.com/article/SB1000142405311190348090457651062077844319...

Listen, I do not really care if someone is "a business analyst", a "senior business analyst", if he writes for this magazine, or that, or if he is a Precentral writer. Remember, all people are born equal.

I only care if what one says makes sense, or not. It doesn't make sense to say that Google plans to "integrate vertically". They most certainly don't.

"'Vertical integration is clearly the business model of the day,' Gartner Inc. analyst Van Baker said."
OK, it might be the model of the day, but it so happens it is NOT Google Android's business model, even if it is the latest and greatest on the Street.

Capisci, everyone? Can we move on now?