Does Sony Ericsson fate provide Googorola clues?

Oct 27, 2011 15:41 EDT

While Google made no secret of the fact that it is buying Motorola Mobility for its patents, the remaining unanswered question is what it does with the handset business. Now that Sony  is planning to take full ownership of its mobile joint venture with Ericsson, its behavior may provide some clues as to what “Googorola” should do.
The idea seems to be that Sony will make its smartphones work more closely with other devices such as game consoles, tablets, computers and TVs.  Imagine watching a movie on the train home and then transferring it seamlessly to the big TV when you reach the living room? It’s a nice idea and coming closer to reality with the Sony Ericsson deal according to Evercore analyst Alkesh Shah
“I think there’s a major change happening in terms of how media and communications will be delivered to and from smartphones and to other devices in your home including your set-top boxes and TVs” said Shah.
If it follows Sony’s lead,  it would make a lot of sense for Google to keep the mobile phone business and make Motorola phones work more tightly with Motorola set-top boxes, and of course tablets based on Google’s Android software, Shah said.  “It may happen,” he said.
On the other hand Avian Securities analyst Matthew Thornton ‘s interpretation of the Sony news went in the opposite direction.   The argument is that Google might want to sell Motorola’s handset business, which already depends on Android, in order to placate other Android phone hardware makers and convince them Motorola won’t get  preferential treatment.
One potential buyer? Sony, reckons Thornton. Since Sony will have full control of the handset business for the first time, it might be in a good position to merge it with Motorola’s phone business, Thornton said.
“Having a JV acquire is very complex” he said. “If Sony really wants a presence in the Americas and in China (buying) Motorola makes sense rather than trying to do it organically. It comes down to what Google wants to do with the business.”

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