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GOOGLE’S ACQUISITION OF MOTOROLA MAY LEAD TO HANDSET COST REDUCTIONS IN BRIC COUNTRIES

Friday, September 09, 2011

Google's acquisition of Motorola Mobility is being greeted warmly in Russia and other emerging markets.  The high price of smartphones is a real barrier to widespread adoption in emerging markets because mobile phones are not subsidized like they are in the U.S. – i.e. no 2-year contracts.  In Russia and other emerging markets consumers pay full price for a phone unlike in U.S. 

So with the Motorola acquisition Russians are seeing some real bright points. With Google making a bigger commitment to Android via Motorola:

•    the price point for the higher-quality handsets might will be lower and they will be made more available for the average consumers;
•    BRIC countries will receive an infusion of innovation and experience higher usages levels;
•    the impact of better mobiles can be expected to be that much greater given that emerging markets tend to rely more on mobile devices (and all the information and connectivity that brings along) than desktop computers.

This deal will prove to be a tremendous boost to the telecommunications industry given that it will increase competition – thereby, enabling consumers to have access to better and more economically priced mobile phones.

Do you all think this deal is a thumbs-up or a thumbs-down?

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