Google bought struggling Motorola Mobility last year in a deal that cost over $12 billion dollars. Ever since, Google has been restructuring and reorganizing in attempts to make the company profitable again. Two weeks ago news broke that Google would be axing 4,000 jobs at Motorola and closing offices. Now more details about the cuts have surfaced.
Motorola in India Shut Down (Almost)
It turns out that a lot of these cuts are focused on Motorola’s India market. Rajat Agrawal at BGR India reports, “Motorola is shutting down its operations in India and across Asia Pacific.” Sounds rather grim, doesn’t it? It’s not as clear-cut as it sounds, and I’ll get to that soon. What I am surprised about is the fact that Motorola is focusing its cuts in India of all places.
India’s population—and potential market—is three times the size of America’s. Their economy is still growing at a good pace. The media bombards us with news about how fertile markets are in India and China and yet, here is Google/Motorola pulling out of said market. The move could be a refocusing of their markets, though. An official statement from Motorola Mobility to BGR India states, “we continue to have a significant presence in key markets in Asia-Pacific in addition to Korea and Australia. This includes, among others, mainland China.” Perhaps Motorola is looking to avoid competition with homegrown mobile companies in India and sticking with where it has better established itself.
Motorola isn’t jumping ship completely on India though. IBN Live (a partner with CNN) writes that Motorola announced it will “continue to sell its products in India till stocks [dry] up, and that their service centers would be operational.” But after their inventories are sold, that appears to be it for Motorola in India. Workers involved in work related to US and other markets appear to be keeping their jobs as well.
Is this a Market Mistake? Probably not.
My initial reaction to this news was one of surprise. I can’t see the logic in letting go of a market as vast as India’s. Of course, I’m no expert on India, and I have read that domestic competitors are doing pretty well. Ultimately it might come down to Google’s primary motives for buying Motorola Mobility in the first place. Apurva Chaudhary for MediaNama reminds us that “Google agreed to acquire Motorola Mobility … for its 17,000 patent portfolio, with the stated intent of this helping Google in defending its mobile operating system Android.”
Maybe Google just needs to get Motorola Mobility profitable again, as an afterthought to its patent acquisitions. Google doesn’t like losing money (what company does?) but it doesn’t need Motorola to be a dominant player in the mobile market. Losing a market like India might not be a big deal to Google, as its Android OS works on multiple phones and its services are already used in the country. If Motorola were acting independently, it certainly would have been a big deal to the company to exit the Indian market.
Time will tell whether Google’s restructuring, layoffs, and refocusing of Motorola Mobility will turn the company around. For competition’s sake, and for the sake of the employees still there, let’s hope it works.
Do you think leaving India is a good move for Google’s Motorola Mobility?