Google: Was Motorola a bad deal?

IE Focus | By Enrique Dans, Professor at IE Business School

Google bought Motorola for 12.5 billion dollars, invested in it to make it competitive and then sold it for  2.91 million, keeping its patent portfolio. A tale of success or failure?

Google has sold its Motorola mobile phone business to Lenovo for 2.91 billion dollars, thereby demonstrating that hardware, although it plays a crucial role in strategy development, is seen by the company as being a factor that is somewhere between marginal and accidental.

Google’s acquisition of Motorola was one of the biggest surprises of the summer of 2011. Google paid 12.5 billion for a legendary manufacturer that had come down in the world, but which had a massive portfolio of patents that could be fundamental in navigating the complex scenario of litigations the company was thinking of launching at the time.

Moreover, the acquisition posed a problem. If Google’s strategy with Android was to make itself attractive to all  Smartphone producers, how would said producers feel about the fact that the company that was selling them something as vital as an operating system would also be competing against them through its own newly acquired handset manufacturer? Becoming a mobile phone manufacturer was a dangerously incoherent move by Google.


IE Event || Marketing the Subconscious

“The Art of Seduction ― Marketing the Subconscious” will explore the history and theory of appealing emotionally to potential clients and customers, and discuss ways to do so.  The seminar, hosted by Seoul Global Center, will feature a guest talk from Prof. William Davila, Associate Professor of marketing at Madrid’s IE Business School, which specializes in entrepreneurship,…


Can Nokia compete with the iPad?

IE Focus | By Ricardo Perez, Professor at IE Business School

Nokia is still a leader in terms of sales, but the crown of innovation has now passed to Apple. In order to get it back, Nokia needs to reinvent itself as a mobile services company that offers multiple benefits to its partners. At the last world mobiles congress in Barcelona, Nokia and Intel revealed their plans for the joint development of software for all kinds of devices to compete with Apple and Google. Nokia takes another step forward in its strategy of creating a technological platform that returns it to a position that will enable it to take the initiative in the most interesting market at the present time, i.e. smart phones like the iPhone, and in new markets, such as the one created recently by the iPad. Don´t worry, I won’t go on about the iPad; what I want to speak about is Nokia and its position in today´s market. It is a story of what can happen to a leading company if it comes up with the wrong definition of the business game it is playing. The loss of leadership this causes has happened to others: it has happened to Sony with its music players and its video consoles over the last two years. Nokia had worked hard to create the different technological platforms it believed would enable it to win in the mobile market. Symbian, its key product, has also seen defeat. Allow me to explain.

Nokia established the rules for the top-of-the-range telephone market before iPhone. It created an alliance to produce the base software (operating system) with which telephones worked (Symbian, theoretically neutral and owned by many companies on the market). It also made sure that what users saw on the telephone when they used the menus (user interface) was the development and property of each of Symbian´s partners, which meant it could not enter the market as a competitor. The rules were clear and benefited Nokia in a market that competed in terms of the electronics and “additional utilities” of the telephone (best camera, GPS, etc.).