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Thursday, February 16, 2012

Google's opportunity

Before I left Pfizer, I was a successful manager. I managed my projects and people very well. (That's not me being arrogant, its just a fact. The numbers back me up.)  So when I saw this headline yesterday about the delay Motorola will experience updating phones to Android 4.0 I just shook my head.

Google is about to buy a hardware company that can not coordinate software updates in real-time, let alone a reasonable timeline.  Obviously there are reasons for this, phone specific hardware and software that needs to be upgraded to support the new OS. (A lot being Google's fault.)

The scenario continues to highlight the weakness Google has over the iPhone.  With my manager hat on, if I had a role project managing software/hardware updates for Android and Motorola with the combined company, I can say with complete certainty, I would never allow the above scenario to take place. Never.

If I was an executive level manager for GOOG+MMI, once I witnessed the iPhone controlling 2/3 profits of the entire mobile phone industry, a need for tweaking the business model and strategy becomes obvious. (Seeing the below chart, created by asymco.com, the realization would be more like a bag full of bricks smacking you in the face.)

At a certain point Google is going to have to stop dicking around, and improve their mobile offering.

An inefficiency is simply an opportunity to improve. If I can realize this, I am sure the smart people at Google have thought of it too.

Google is in a pretty enviable position, especially after the MMI acquisition.  They have all the pieces they need to properly compete, and create a viable ecosystem with enough differentiation to the Apple strategy. (Heck, I would love the opportunity to merge the units and create the synergies to produce a kick-ass mobile offering. But the above chart tells investors, this objective is very important, so-much-so, it belongs to an individual reporting directly to Mr Page.)

If the combined company can concentrate the phone offerings, thereby increasing manufacturing margins and removing the lack of coordination highlighted above, as key areas of focus, then Google can become a viable competitor to Apple.

But seeing is believing. Until then, GOOG seems like it wants to come down some more, as it has the perception of dicking around. Or, at the very least, chill at the high 500 level. (I would like to start picking some up near 580.)


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