Google Combines its Greatest Innovations
Maxwell is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The battle rages in the world of Big Tech. The Apple (NASDAQ: AAPL) machine has stood the test of time. It’s visionary leadership and innovation has kept it at the top of the technology industry, even to its current position as the most valuable company, a position held previously by its arch nemesis, Microsoft (NASDAQ: MSFT). Demand for Apple’s products has helped the company increase profit even faster than its stock price.
There was no doubt that the iPad 3 will succeed in beating back any competition and keep Apple on top, as they are the dominant provider of both smartphones and tablets.
Then suddenly, there appeared the Webtop.
Brave New World
In a world where smartphones outsell PC’s, many consumers wondered if they could have their cake and eat it too. The idea of a hybrid phone/PC seemed doable, but could it be done well?
Leave it to the Google (NASDAQ: GOOG) Goliath to make it so. Google has been a leader in online activity for over a decade. In a flurry of product releases, acquisitions, and partnerships, the company quickly became so big as to now be a slang word that means “search”.
Offering a host of other services beyond initial web search focus, including email, document management and a social networking service, the innovators of Google have greatly expanded the smartphone market through its Android platform. Even though Apple’s iOS still holds a slight lead over Android, both platforms have gained noteworthy market share unlike their competitor RIM. It was up to about 33% of the market share in Q4 2011 compared to Apple’s 37%.
Now, Google has combined its two great innovations. Through a partnership with Motorola (NYSE: MMI) it has made the most notable movement toward combining phone and PC with its new Webtop – a smartphone/PC hybrid that made the Motorola Atrix act like a computer once docked on the ‘Lapdock’.
The Motorola-Google Powerhouse
It seems odd that over a decade ago, companies knew the implications of smartphones. Bill Gates often said that phones would eventually replace big bulky towers. Steve Jobs also talked frequently about a ‘Post-PC’ era. Still, neither Microsoft nor Apple have made the leap to using their smartphones as PC replacements.
Google was the answer because of its partnerships. The success of Android was not in keeping it too itself, but in making several devices compatible, working with several different carriers, and meeting the need of a connected world in an adaptable device. For businesses, this meant access to documents, files, and presentations saved in the Google docs cloud. For others, it was the link to their social media networks like YouTube or Facebook.
Google relied on one of its partners to fix the flaws of the past with smartphone-into-PC products. One of the major problems was the delay in screen display. Another was that there simply wasn’t sufficient RAM for proper functioning. With Motorola’s leaders pushing the limits of innovation, the Webtop 2.0 could be a staunch competitor to the iProducts.
The concept for Webtop started in 2009 when a few Motorola engineers asked how they could fix a few problems with web browsing in smartphones. The idea born was one of a dockable phone with a desktop environment and a full Web browser embedded inside. The vision was to maximize the user experience of the cell phone with a keyboard, mouse, and large screen.
The timing turned out to be a ‘perfect storm’ of good fortune. Webtop would be tied to the product line set to be launched at the same time: the Atrix smartphone. At the same time, AT&T was reaching out to other companies as their exclusive contract with Apple for the iPhone was ending December 2010. With AT&T executives loving what they saw in the product, they urged the rolling out of the Atrix and Webtop to compete with yet another HTC phone that was becoming a hot seller.
The launch was a success. Webtop caught the entire tech industry by surprise. Competitors didn't have anything like it. What is more, Motorola didn’t rest on a job well done. Partnering with Google, the company has quickly rolled out Webtop 2.0, this time with several other partners such as Verizon’s Motorola Droid Razr. Some of the key improvements were an updated version of Firefox, a customizable app bar, added VGA video-out capability (a big selling point for businesses who had nothing but the iPad to rely on) and a powerful, long-lasting battery.
What Will Happen
It comes down to the issue of size. Apple customers are forced to get both an iPhone and an iPad in order to have the function of both, not in terms of functionality, but in practicality. A business man or woman does not want to give a presentation from his or her cell phone. Likewise, it would be awkward to answer a phone call from your iPad (skype features excluded).
The Motorola Google team has solved the problem by the Atrix with Webtop. For both companies, this can result in nothing but good. Motorola can market to just about all carriers with no competition. This could mean a silver bullet that could simultaneously put them ahead of HTC and Nokia.
It seems unlikely, however that, even with this product, it will be able to touch Apple. The iPhone is the best selling phone in the world and will likely stay far ahead. But more importantly, Apple does not live by iPhone alone, but also by a host of other products that others can’t touch. Try as they might, competitors just can’t make a better tablet than the iPad.
This is the key to Google’s success from this product. Google is also not reliant upon the success of the Atrix with Webtop. With almost 95% of Google’s Revenue coming from advertising, it would seem that it’s line of products is icing on the cake. Google can (and should) continue this structure in order to establish sustainable success.
Google has earned its top ranking and investors would be wise to continue to look toward Google for growth and profitability. Likewise, Motorola will also continue an upward trajectory because of its innovation and willingness to push current industry limitations.
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