If Google (NSDQ: GOOG) gets the green light to buy Motorola (NYSE: MMI) Mobility for $12.5 billion, one area where the deal could be especially significant is in Europe, where Motorola has all but disappeared after once enjoying a healthy share of the mobile device pie.
According to figures from Strategy Analytics, at the end of last year Motorola had 0.7 percent share of the European mobile market. Compare that to only five years ago, when Motorola had a 16.1 percent share. Today, that percentage would put Motorola right between Apple (NSDQ: AAPL) and Samsung in smartphones, or just behind Samsung overall as a strong number-three.
Part of Motorola’s decline in Europe was down to its own strategy — a reversal of what Nokia (NYSE: NOK) has been doing of late in the U.S., if you will. It decided to pull back from declining operations in Europe as a way of cutting costs and keeping its focus on its home market. (Although that hasn’t meant disappearing altogether. Just yesterday, Motorola announced a new device, the rugged DEFY+, which will start to sell in Europe, Asia and Africa in the Autumn.)
Meanwhile, Android has been seeing a very strong surge in the region — as it has been worldwide — and Google has centered quite a bit of its mobile development in London. If Google has bought Motorola not only for its patents, but also to have stronger design control over at least one Android licensee, then the European market may see some of the first fruits of that new union.
Back in February, Motorola Mobility’s CEO Sanjay Jha acknowledged “we still need to do some work” in Europe, in an interview with the FT. His approach at the time was to seek out a strong carrier agreement, similar to the kind Motorola enjoys with Verizon. That has yet to materialize, and it will be interesting to see whether the Google connection will make it happen — or result in a completely different strategy.
Ironically, although carriers in the U.S. have yet to make public statements on the deal (although they will surely be coming out with a lot of response in the weeks and months to come), a few that have had something to say have been in Europe, of all places.
Yves Maitre, a group SVP at France Telecom’s Orange, said the deal was “great news” and welcomed the idea of one more integrated handset maker to compete against Apple — Nokia having bowed out of that game with its embrace of Microsoft’s Windows Phone 7 (via AllThingsD).
O2 is a bit more neutral on the idea: “We’re watching these developments with interest, as you’d expect,” a spokesperson told mocoNews. “Consolidation of our industries is something we have anticipated for some time now, and the Google/Motorola news represents how the new digital age is shaping up. Telefonica (NYSE: TEF) enjoys a good working relationship with both parties.”
Update: Vodafone (NYSE: VOD) has now also chimed in with a positive response. “We welcome this move. We believe it is good for the mobile industry to have strong competition as this continues to drive innovation, ultimately for the benefit of customers,” a spokesperson said in an emailed statement.
Legal battles. Despite Motorola’s small share of the market, the other area where it has been making waves in Europe is over legal proceedings versus Apple, which has put the boot in, via the courts, over Xoom designs: Apple claims the Xoom infringes on its market-leading iPad tablet. This was a countersuit, filed in May 2011, in response to a patent suit first filed by Motorola against Apple in April 2011. Unlike the Samsung case, this case, also filed in Dusseldorf, has not yet resulted in any injunctions on devices.
“Motorola has reviewed Apple’s claims and believe they have no merit. We intend to vigorously defend Motorola’s own product designs,” says Motorola.