Motorola has been a major name in the communications industry long before the cell phone was ever dreamed of. It could be said that Motorola is the foundation of cellular technology as we know it, since the venerable company is responsible for creating the first walkie-talkie. While Motorola’s contributions to the communications industry are immeasurable, their narrow focus was ultimately their undoing.
Google’s recent sale of Motorola Mobility to Lenovo for $2.91 billion underscores the dangers of companies focusing only on hardware development. Motorola is only one of the many companies who are being bought and sold merely for their patent portfolios. Entrepreneurs and smaller companies may seek to be bought out as an endgame, but when large corporations are bought and sold, much more is at stake.
Lenovo and Google both won big in the sale and both companies saved themselves years in R&D and millions of dollars in expensive litigation through access to an expansive patent portfolio. However, Motorola has, in essence, been reduced to a recognizable name to save additional money on establishing a new brand.
Motorola isn’t alone though- Nokia was recently purchased by Microsoft and the merger is set to go smoothly. Blackberry is next on the list of mobile companies to be cannibalized, as the struggling company has failed to regain success after multiple attempts to reinvent itself. Even the more successful phone makers may find themselves being sized up by the big guys over in Silicon Valley.
The future of the mobile market isn’t just cell phones anymore; devices will need to be integrated into a larger suite of products to give users a seamless experience throughout their day. As the Internet of Things and networked homes continues to gain steam, there is plenty of room for existing companies to evolve. If cell phone makers want to maintain their independence, they need to think hard about their brands.
What do you think?