With the announcement today from Google that they are selling Motorola Mobility to Lenovo confirms that the Smartphone market is not a growth area. Lenovo is focused on a race to the bottom of the enterprise space but business smartphones are moving in that area. The decline of the iPhone revenue further validates the general downward direction of the product space.
The reason that Google can jettison Motorola so quickly is that the business is not core to the Google revenue model. For Apple, that is not the case. By reviewing the acquisitions by Google and the Google Ventures portfolio pipeline, you can see that Google is going in a very strategic set of "blue ocean" new markets. Apple, on the other hand, must diversify into the iWatch and the iRadio and other ecosystems gradually.
Google did two strategic moves to hedge against the China Mobile deal. The first move was to sign an agreement with Samsung for patents and licensing and the second was to partner, essentially, with Lenovo to license the Android and ad platform of Google in exchange for a manufacturing partner in China and, ultimately, an end-destination selling point.
It appears that without the Steve Jobs' intimidation factor, Apple is not in control of it's destiny. Bullies are pushing around Apple and it takes an Icahn to be the defender of the company. Given Cook appealed to AT&T, Verizon, and Sprint to change their carrier plans given the DROP in iPhone says projected going into 2Q2014 raises grave concerns about cash flow until the new product cycles kick-in.
Google acquired Motorola Mobility to gain access to the valuable patents that it still retains. After dabbling in the mass market appeal of the Smartphones given Apple-envy, it or rather the Board determined that hardware in the consumer market is not a strategic play given the smartphone marginalization.
So, is the Smartphone DEAD? No. Is it GROWING? No. Is is DECLINING? Yes.
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