Part 1. An interesting last few days in which Google adjusted it’s portfolio, ditching Motorola Mobility and acquiring the Intelligent Home company Nest.
The first part of this post focuses on Michael Porter’s 5 forces proving that ex Intel CEO, Andy Grove’s 6 force, complementary partnerships, provides Samsung/Google come additional ecosystem ammunition vs. Apple.
On Monday, Google and Samsung announced a long-term patent licensing deal. That will give access to each other’s patented technology and allow Samsung to concentrate on its legal battle with Apple.
The strategic logic for the Google and Samsung deal – a software-hardware alliance can be more effective that one company trying to do the whole thing itself (as Apple does). As mobile reaches maturity, half the worlds population now has a mobile phone, the alliance puts under the spotlight whether Apples tight vertical integration will continue to provide revenue growth against the horizontal integration led by Google and Samsung.
As Ben Evans posted , all the growth is from the very low end. Over the next few years the great majority of that 3.5-4bn will convert to smart and data. If Apple continues the current strategy and share growth, it will end up with (say) 15% unit share. 15% of 3.5bn is 525m. Which by the way is a far larger ecosystem than Wintel achieved at the height of it’s Monopoly but no Gorilla.