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Did Google Undervalue The Power Of A Brand?

It sounds like Google has aquired much of HTC's hardware team and some non-exclusive IP in their latest 1+ billion deal. But I also read that HTC will likely continue on with a new phone separately, using the HTC brand name. So this might mean that Google isn't going to use the HTC name for a product, and may not have acquired the rights to the brand name. This makes sense, as they have now branded their smartphone and some other hardware products as "Pixel". Before that, they had used the "Nexus" brand name for many products.

Back in 2012, it sounded like Google did a similar but slightly different type of acquisition with Motorola. That deal was worth 12+ billion, and they acquired the hardware team and IP. But I believe they also acquired the brand name, and the entire Motorola company, in that much bigger deal. However, they haven't kept the brand name, and did not use it on many products. I believe Lenovo later bought the rights to the Moto and Motorola brand names along with some other assets in a deal with Google.

Missed Opportunity

I find it interesting that Google ended up not using the Motorola brand name, and selling the brand name to Lenovo. And with this smaller HTC deal, it sounds like they again won't be using the brand name in their large purchase of a fairly prominent hardware company's assets. Just like Moto, HTC is a hardware brand that has actually been around for a very long time, going back to Microsoft's Pocket PC mobile OS.

I wonder if Google missed an opportunity when making their decisions to buy HTC and Motorola. HTC may not be a strong enough brand name. But Motorola, and their nickname brand Moto, were and are very strong brand names. So much so, that Lenovo purchased Motorola and its name from Google. And they even decided to keep the brand name and ditched its own brand name for the Moto phones. It sounded like they originally thought they would go with "Moto by Lenovo", and even decided against that to just use Moto by itself as the brand name for Moto branded phones.

Brand Name Value

Brand names can be quite valuable. Other good brand names in the smartphone technology space that have been acquired in deals include Nokia and Palm. If you either want to use your own brand name like "Google Phone", or a brand name you come up with like "Pixel", then you make the decision that you don't want to buy a company partially for its brand name. But Google payed so much for Motorola, a brand name that was up there with Nokia and Palm, because of its history with the popular Moto Razr and other phones.

And now it looks like Google is getting serious again about upping their hardware game and getting a better team in-house. To go head to head with the iPhone like most articles say. But they have chosen not to buy an established brand name as part of the costly deal when other companies have payed a lot of money largely, or at least partially, for the brand names of Moto, Nokia, and Palm. Personally, I agree that not using HTC as their main smartphone brand is probably the best move. But it still makes me think of that big deal for Motorola as well. I just think Google might have been able to get a leg up if they had made more of a commitment to the established Moto brand by using it for the first smartphone they developed in-house.

But Android Won

Of course, it's worth noting that both the Nokia and Palm acquisitions did not turn out well. Maybe Google knew what it was doing when it decided not to go with the Moto brand name, but go with their own brand "Google Nexus". It's Android that is still going strong, while the Palm and Nokia brand names were kind of squandered by HP and Microsoft.

There are so many other factors though. I still think Microsoft and HP were wise to use the strong Nokia and Palm brand names after their equally huge deals for those companies. Microsoft's deal for Nokia was around 7 billion, and HP's deal for Palm around 1 billion. But at least they wanted to use the great smartphone brand names. Windows Mobile and Palm OS are basically dead for now and both companies resold the brand names of Nokia and Palm just as Google resold the Moto and Motorola brand names. However Google payed around 12 billion for Moto and 1 billion for HTC, but it doesn't look like they will use the brand names at all.

Tough Decision

It's a touch decison though. How far do they go with it? Would we now have a "Moto Home" and a "Moto Notebook"? Google decided they didn't want to use Motorola, and now HTC, as brands for their smartphone or other hardware devices. I'm not saying they made the wrong decision for sure. But they sure payed a hefty price, especially in the Motorola deal, to end up not using such a strong brand name. They are paying billions of dollars in these hardware deals to further their commitment to making their own Android devices with integrated hardware and software. But they may have missed an opportunity to at least start off using a solid smartphone brand name like Moto, HTC, or some other established brand, when they made these huge acquisition deals.