Google's grand plan for Motorola: downsizing

Google's grand plan for Motorola: downsizing

Leaving aside issues of cash and profitability, you can't really see how Motorola is any better off having been gobbled up by industry giant Google.

In fact, if anything the company's standing seems to have dropped since the $12.4bn buyout, and there still doesn't seem to be any kind of coherent strategy in place – or not to the extent that Google will tell us anyway.

But with the deal having finally been wrapped up in May, we're finally getting a hint of what Google has in mind for its new plaything, and the first step isn't a surprising one: cuts.

The New York Times is reporting that major restructuring will result in a full 20% of Motorola's workforce being shown the door, mainly in the US but also in Asia and India, while R&D spending cutbacks are also planned for Moto's Chicago, Sunnyvale and Beijing centres and a full third of the company's 94 offices worldwide are to close their doors.

This follows a 40% cull in the company's vice-presidents (surely one of the biggest cash drains in any large corporate business).

New Motorola boss Dennis Woodside says the streamlining is part of Moto's efforts to move away from entry-level devices and focus its efforts on “a few cellphones instead of dozens” – though whether that's a voluntary shift or the result of pressure from Google he doesn't say.

He did insist that Motorola remains and entirely separate entity that makes its own decisions, but while it's easy to say that on paper, Woodside's own past as a senior Google exec suggests there may be plenty of space between the lines here.

It also means he probably has a better take than most on just why Google chose to buy Motorola in the first place, and he makes an interesting point on the subject:

“The Google business is built on a wired model, and as the world moves to a pretty much completely wireless model over time, it’s really going to be important for Google to understand everything about the mobile consumer.”

So will Moto's new strategy work? Time will tell. From LG to Nokia, and Sony to HTC, we've seen a good few of these “refocusing” efforts over the past couple of years – mainly because (just as is the case with Motorola) things haven't exactly been going swimmingly.

And what we've seen is that it doesn't actually matter all that much. Whether it's high-end powerhouses or cheap-as-chips bargain hunters you focus on, a truckload of models or just a few, it's the handsets themselves that count. If they're good, people will buy them – that's all there is to it. The rest is just PR posturing.

Read more about: Android

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8 comments

JanSt / MOD  Aug. 13, 2012 at 12:55

Worth considering the trivial little fact that the global economy is f*cked?
How much space does that leave for how many big players?
I know a lot of folks who used to buy phones to play with them for a day or two... Not happening anymore.
Samsung too are struggling. Their smartphones hold the business together. Sony? Etc etc...
I remember when GTA SA came out. You could buy it just-the-game, or get it free with the then newly released PS2 Slim. When stores ran out of disks, people just took the console.
Money wasn't an issue - or so it seemed. Those days are over.
Coinciding: I think a lot of people got used to smartphones now. The 'thrill' is gone.
They are now something normal, or - whoa - something one may not even need. At least not more than food or mortgage repayments and car insurance...

Google are a lot of things, but they aren't stupid. I'm sure they knew downsizing was on the horizon.

Pondlife  Aug. 13, 2012 at 13:07

Can you reconcile that downturn with the way that Samsung and Apple are selling increasing amounts of their flagship phones year on year then?

Pondlife  Aug. 13, 2012 at 13:11

I don't remember any rush for the ps2 slim though tbh

lcurdie / MOD  Aug. 13, 2012 at 14:22

Is anyone else wondering why there's an HTC logo on a Motorola-focused article? I should probably tell Martin, but... ;)

Pondlife  Aug. 13, 2012 at 14:49

Just assumed Martin figured he was quietly brilliant...

matt101101 / MOD  Aug. 13, 2012 at 17:36

Worth considering the trivial little fact that the global economy is f*cked?
How much space does that leave for how many big players?
I know a lot of folks who used to buy phones to play with them for a day or two... Not happening anymore.
Samsung too are struggling. Their smartphones hold the business together. Sony? Etc etc...
I remember when GTA SA came out. You could buy it just-the-game, or get it free with the then newly released PS2 Slim. When stores ran out of disks, people just took the console.
Money wasn't an issue - or so it seemed. Those days are over.
Coinciding: I think a lot of people got used to smartphones now. The 'thrill' is gone.
They are now something normal, or - whoa - something one may not even need. At least not more than food or mortgage repayments and car insurance...

Google are a lot of things, but they aren't stupid. I'm sure they knew downsizing was on the horizon.

I agree, and I shall be back for my own rant on the matter when I have more time. For now, here's a nice place holder comment.

JanSt / MOD  Aug. 13, 2012 at 17:48

Is anyone else wondering why there's an HTC logo on a Motorola-focused article? I should probably tell Martin, but... ;)
I think that is a great touch! Gotta keep readers alert. Quietly brilliantly so...
You just have writer's envy :p

martinjjames / MOD  Aug. 13, 2012 at 23:18

Good lord that's a bad mistake. Even considering I had a 2-year old trying to wrap my eyelids around my head at the time.

Oh and a special word of thanks to Lewis for actively doing nothing at all to sort it out. With friends like these... ;)

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