What if Google were to make Android proprietary to Motorola? That’s the scenario that Piper Jaffray analysts are putting out there, and they think that Google could make a lot of money if they went that route.
Gene Munster, a senior research analyst at Piper Jaffray and Co., thinks that Google will hold on to Motorola Mobility’s patents and sell off the company’s device and set-top box businesses. However, if they closed off Android from other OEMs and makes it exclusive to Motorola hardware, he estimates that the company will see $10 billion in operating profit in 2015, which would add about 35 percent to its overall income.
“It’s massively accretive, but unlikely to happen given Google is too concerned about losing search share to Bing,” said Munster.
Such a decision, however, would cede market share to Microsoft. Google would also have to give up its current strategy of being the leader in mobile search and advertising and would lose $4.5 billion in Android ad revenue at $10 per user in 2015, compared to Android’s current trajectory.
Andy Rubin, Google’s senior vice president of mobile, said of the purchase of Motorola, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community.”
Source: AdWeek
