Nexus One Aftermath: What Should Motorola Do Now?

Co-CEO Sanjay Jha bet big on the Android OS, but Google released the rival smartphone Nexus One. Acquiring Palm could be the solution for Motorola

By Om Malik

When Google announced its Nexus One phone, it appeared that the new Android-driven connected device ecosystem would be a three-headed monster: Qualcomm (QCOM) as provider of the chips, Google (GOOG) as maker of the operating system, and HTC (2498:TT) as the preferred device manufacturer. (In the PC-centric WinTel world, the infamous troika consisted of Microsoft, Intel, and Dell.) The Nexus One release essentially left Motorola (MOT) and the guy who bet the company on Android, co-CEO Sanjay Jha, out in the cold.

At the device's unveiling held at the Googleplex, the search giant made a big effort to dispel the notion that it's doing an end run around its partners. Google even got Jha to show up, get on stage, and mutter some polite nothings. It didn't go unnoticed that he was late getting there—he cited traffic—and left as soon as it was over.

Well, paint me cynical, but guys who have corporate Gulfstreams at their disposal don't get delayed in traffic unless they want to. More important, his onstage body language made clear that Motorola wasn't too thrilled about the Nexus One, especially after publicly betting the farm on Android.

Indeed, I've since had two very senior sources in the mobile industry confirm as much.

Disadvantage Droid

If I was Jha, I'd sure feel snookered. And soon, the Verizon Wireless (VZ, VOD) version of the Nexus One will be available, sales of which will undoubtedly come at the expense of the Droid, which is made by Motorola. The winner will once again will be HTC, the Taiwanese smartphone maker in which Qualcomm holds a minority interest.

"We had an investment in HTC very early on. And I knew Peter Chao (HTC's chief executive)," Qualcomm CEO Paul Jacobs told CNET's Brooke Crothers some two years ago. When talking about Android, Qualcomm, and HTC, Jacobs said, "It was kind of like a bunch of people who had known each other for a long time in the wireless industries coming together." I wonder if HTC will build a Qualcomm-powered, Chrome OS-based device—smartbook or tablet—next. (That special Qualcomm-HTC relationship is perhaps the reason why HTC is porting its Sense technology to the increasingly irrelevant BREW platform.)

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