Aug 23, 2011Last week, Google announced that it plans to purchase Motorola Mobility. If you've been following the financial news for the past year, you know that Motorola recently split into two companies (see Motorola Exec Says the Company's Split, Effective Today, Is Good for RFID). Motorola Mobility comprises the firm's cell-phone business, while Motorola Solutions includes automatic-identification technologies (bar codes and RFID), as well as the firm's enterprise radio business that manufactures a lot of communication tools for police and first responders.
By most accounts, Google's decision to acquire Motorola Mobility was driven by a desire to own Motorola's more than 17,000 patents, because technology companies are increasingly using patents to block one another in the marketplace (see Google Escalates the Patent Arms Race and When Patents Attack).
While that may be true, the acquisition's unintended consequence is that Google could emerge as the gorilla in the mobile-payment space. Companies are fighting to control mobile transactions—payments with cell phones based on Near-Field Communication (NFC) technology. Google has already worked with Samsung on the Nexus S smart phone, which has built-in NFC capabilities (see NFC Used by Exhibitors at RFID Journal LIVE! 2011).
It could well be that the purchase of Motorola Mobility leads Google to discover the power of NFC applications—including payment systems—running on its Motorola handsets. Google has already been testing the Hotpot service, based on NFC technology, which aims to connect consumers with businesses (see Google Brings RFID-enabled Hotpot to Portland, Austin).
In order to dominate mobile payments, all that Google needs to do is to place an NFC reader in every Motorola phone, ensure transaction security and find a convenient and inexpensive way for retailers to accept payments via telephone—once that happens, watch out.
Is Google looking to dominate mobile payments? I think so. Will it pour a lot of money into NFC? Perhaps not—but that doesn't mean the company won't innovate. Remember: Search advertising was once dismissed within Google as something that would never bring in very much revenue.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.