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Should Google Keep Motorola’s Patents and Sell Off the Hardware Business?

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Google insists that even if it is allowed to swallow Motorola Mobility, nothing need change between it and other Android partners such as HTC, Samsung and Sony Ericsson.

“This acquisition will not change our commitment to run Android as an open platform,” Google CEO Larry Page said in a blog post on Monday. “We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.”

But just how realistic is that pitch?

“No one has ever had success licensing [an operating system] and competing with their licensees,” Gartner analyst Michael Gartenberg told AllThingsD.

In the mobile space, Palm tried it before with its original operating system, while Apple also dabbled with it many years ago on the Mac side. Both ultimately ended by giving up on the effort.

One option that might please both regulators and other Android hardware partners alike is if the company sold off Motorola’s handset business as part of the deal.

Device makers are already struggling with the amount of control Google exerts over Android, especially since Google has dabbled in the hardware space with its Nexus line of products. The company has also deliberately played favorites with each Android release, always working closely with a particular hardware maker on a “lead device.”

Although no one liked when it was not their turn, Google did try to spread the wealth, partnering with HTC on the Nexus One, Samsung on the Nexus S and Motorola on the Xoom.

How that changes in a world where Google owns a key hardware maker is hard to say.

“It’s not always clear whether the 800-pound gorilla can swim,” said Gartenberg. “But, when it jumps in the pool, it makes a big splash and gets everyone all wet.”

Google, for its part, said Android device makers it has talked to have generally supported the deal, particularly because of the potential patent protection they might get against assaults from Apple, Microsoft and others that have alleged that Android infringes on their intellectual property. On its Web site, Google posted statements from the leaders of Samsung, HTC, LG and Sony Ericsson saying they back the deal.

“We are supportive of Google’s acquisition of Motorola Mobility as this is a positive development to the Android ecosystem, which we believe is beneficial to HTC’s promotion of Android phones,” HTC said in a statement to AllThingsD. “The partnership between HTC and Google remains strong and will not be affected by this acquisition.”

That said, it’s not like those whose businesses depend on Android have a lot of compelling alternatives, at least in the short term. Yes, there is Microsoft’s Windows Phone. But Microsoft has a deal with Nokia that, although not an outright acquisition, presents some of the same challenges as does a potential Google-Motorola tie-up.

“It’s probably a little more attractive in that Microsoft didn’t quite buy Nokia, but they do talk about that special relationship,” Gartenberg said.

Hewlett-Packard has said it is open to licensing webOS, but it too makes its own hardware.

As a result, it’s not likely that any of the major hardware makers will abandon Android. Rather, the real risk could be deeper fragmentation, as those that do depend on Android try to add more customization. And, if possible, they will perhaps make themselves somewhat less dependent on Google, even as they use its operating system.

Meanwhile, Google would seem to have a number of options with Motorola Mobility’s hardware business. It could keep it at arm’s length, as just one of many Android hardware makers; it could use it to test out more radical ideas or business models; or it could potentially keep the patents and spin out the hardware unit.

“There’s a lot of ways they can play this and multiple strategies they can do simultaneously,” Gartenberg said.

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