Fallen Soldiers of the Smartphone Wars: The Death of the Palm Mobile OS, and The Google/Motorola Merger

All this economy talk can get a bit laborious and repetitive so I’d like to take a break and talk about gadgets for a bit. This week Motorola one of the first cellphone manufacturers announced they were selling their mobile phone division to Google, and today HP has announced that they are ending production of their WebOS mobile devices. At first glance both of these events seem monumental and slightly unexpected. Unless of course you religiously read this blog! okay not really but if you go back to the article I wrote about my old windows mobile phone two years ago I outlined what I thought would happen to the mobile landscape:

With the release of the iphone, android, and web os from palm war has been declared in the Smartphone world. Microsoft's first response windows mobile 6.5 is a lot like Frances Maginot line which would have been great for the infantry fights of world war 1, but was totally useless against the tanks of world war 2(anybody else want to play risk right now). Like France I think Windows mobile will still exist in the mobile landscape in the next few years, windows mobile 7 will probably be much more useful for today's Smartphone users. To strain this analogy the mobile landscape will probably look like the world after World War 2, with the iphone being America, and android being the Soviet Union, two super powers jockeying for positions. Great Britain= blackberry, France= windows mobile, and Germany = symbian/maemo will still be around, but their spot light may never burn quite as bright (oh in this analogy palm would probably represent Japan hobbled but still innovative).

Looking back I have to say the analogy sorta holds, Blackberry is totally not the world dominating power it once was, neither is Windows phone 7. Granted Symbian is all but dead, but the acquisition of Motorola by Google is totally the iron curtain falling. Strained metaphors aside the best explanation of what is happening is developers can only support 2 maybe 3 platforms at once. Beyond that it is simply too costly. In that way Smartphones are less like computers and more like video game consoles. Since the Atari 2600 there have been 5 major generations of home video game consoles, within each generation there are dozens of devices that emerge yet with each generation there are only at most three real competitors; in order of market strength it went Nintendo/Atari/Sega, Sega/Nintendo/Turbografix 16(questionable), Sony/Nintendo/Sega, Sony/Nintendo/Microsoft(sorry Dreamcast fans), Microsoft/Sony/Nintendo.

Once we understand this dynamic it becomes clear that there was no way that the market could support 6 operating systems. It was obvious early on that Apple and Google had the first two spots which left everyone else battling for number three. As a result HP looked at the recent alliance between Microsoft and Nokia, the two powerhouses left, and the abysmal sales of their current offerings and decided to cut their losses.

HP’s exit was sudden as their entrance. It was not too long ago that HP came in and saved Palm from certain death due to their lack of capital. The problem is HP, as anyone who has struggled with one of their printer drivers knows, is not a software company and running a mobile OS is definitely all about software. While the purchase gave Webos the financial backing it needed there is always a transitional period in these situations especially when a company buys into a new industry. This transitional time cost HP dearly, it delayed the much needed refresh of products at a time when they needed to jump ahead of their competition. It's was similar to Microsoft's purchase of Danger the crew who made the sidekick. The transitional period delayed the release of the Kin which killed before it even got out the door.

The death of Webos further explains why Microsoft went with a partnership with Nokia instead of buying them outright. It allows Microsoft the ability to continue to work with multiple manufacturers and avoids the painful transition period. Conversely it also goes a long way in explaining why Google' s purchase of Motorola was all about patents and the hardware business is simply soda in the value meal. Google is not a hardware company. in addition Google is notorious re-interviewing all the employees of the companies it acquires to make sure they are Google people. It will take at least two or three years for Motorola to be fully integrated into Google, in the meantime the smartphone wars will continue. If anything the only thing that has changed is the other hardware companies making smartphones will give Windows phone another look giving it a better chance at grabbing the number three spot.

Innovation is king in this industry and any of these companies can be shaken from their current position by a great product. But second to innovation is money and quite frankly it means the field is set, Apple is gold, Google is silver, and Microsoft/Nokia will most likely be bronze. As for rim and the blackberry? It isn’t dead, but the chances of it being relevant again any time soon are slim.