Will Taylor

Google buys Motorola: Vertical integration or Android IP play?

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So Google has just bought Mobile handset maker Motorolo Mobility (see announcement on the Google blog), a move that sees Google  vertically integrating into phone hardware.

My initial reaction to this was a worry that by vertically integrating to compete against Apple, this might discourage non-integrated phone makers (such as Sony, Samsung and HTC) from using Android. The argument being that by virtue of the vertical integration, Motorola would have an advantage over other phone manufacturers who use Android (e.g. closer hardware/software integration ala the Apple model).

However, signs point to this being a patent play in response to RIM, Microsoft et al buying up the Nortell patents (which Google has complained to the Antitrust authorities about). The worry being that threats of legal action or patent fees will make Android costly to install on phones.  By acquiring Motorolo’s IP this gives Google something to fight back with (i.e. the ability to threaten to counter-sue).

So hopefully Motoroloa continues to be run as a separate company competing against Sony/Samsung/HTC etc., while Google’s control of Motorola’s patents gives these companies some more legal certainty.

For more reading check out Chris Keal’s piece at the NBR and a pretty detailed piece at the WSJ

UPDATE: A neat info-graphic which shows “who is suing who” in the smartphone wars (HT: @d7street and the NBR article already linked)

 

Matt Nolan

Has monetary policy failed the world?

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There are two views of the long festering economic malaise that has hit the world – the view that monetary policy has done too little (read Sumner – I would put proponents of fiscal policy in the same camp) and the view that the world is re-adjusting to a structural shock and so has to undergo some drop in activity (read Kling).

Now, there is currently no way to really separate which view is right and which view is wrong.  But there is one thing we can keep in mind – during the Great Depression (which has been put down as a time when monetary policy failed) we saw inflation fall well below the Fed’s implied target … but this time they’ve kept things pretty close to where they were aiming.

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Will Taylor

Blog Update

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Those who trawl our site regularly may have noticed the blog has had a visual refresh over the last couple of days.

For those who care, the main changes are:

  • Less ugly: Fairly self explanatory…
  • Social media integration:  this should make it much easier for you tell all your friends how much you disagree with Matt;)
  • Nested comments: This should make it easier to tell which one of Matt’s comments you are disagreeing with;)
  • Rich text editor for comments: So when you want to emphasise how strongly you disagree with Matt you can bold stuff:) (will keep playing with different plugins for this, right now it is very simple)
  • Moar ads, nom nom nom: Sticking to the stereotype placed upon as greedy capitalists, we have switched to google ads. So hopefully there will be more relevant content for you and more beer money for us!

I will probably keep tweaking it over the next couple of weeks and try and add some other modern features. Any suggestions for ways we can improve the blog are welcome!

Matt Nolan

Is it wrong that …

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… the first time any concern popped into my head while reading this cartoon was when, half way through, I suddenly thought “where is the demand curve”?

He shows that supply rises as price rises – and that is great.  And given that the marginal cost is zero, this would give pretty awesome profits.  However, it misses the point that we need a demand curve in order to determine price – and generally as price goes up demand goes down.

My solution.  The firm should start buying and wasting power (generally on things that upset their employees) in order to increase demand!

Although, this might not be socially optimal if, ya know, we care about the welfare of the workers …

 

Matt Nolan

A point on debt

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Around the world there are a lot of complaints that there is too much debt, that debt will prevent a recovery, and that debt is the root of all problems – be it fiscal deficits, debt fueled consumption, or a debt powered housing market.

While there are undeniable issues to keep in mind, there are a few things to remember with these large debt levels – and one of the most important is that there are some people on the otherside of this debt.

Unknown to some is the fact that, as a planet, we are not actually in a net debt position with the rest of the galaxy (although the statistics say otherwise, I think there is an error – rather than us owing money to Martians).  As a result, for every person who has a liability owing there is another person or group who views that as an asset.  When we look at what the “issues” are with debt, we have to keep this point in mind.

Now this sounds like me stating the bleedingly obvious AGAIN … but lets think about some of the conclusions that come out of this:

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Matt Nolan

UK riots

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The riots in the UK are not pleasant, that much is clear.  Seeing such anger and hatred is never nice, but when this is happening to innocent people by a bunch of rioters who just feel bored and want to get kicks it is even more frustrating.

In this context, I find the comments of Nina Power in the Guardian not just distasteful, but sickening.  She lays the blame for these riots not on the shoulders of selfish individuals, but on capitalism and on society – she makes it sound as if the rioters are the victims, and that they are rising up to free themselves of some overbearing “system” that has trapped them.

This type of comment upsets me for two reasons:

  1. It demeans the struggle of those who are genuinely poor, of those who are genuinely oppressed – countries where a dictator presses down the rights of man for his own selfish gain.
  2. It dishonours the actual victims from these riots, and acts as if the rioters have cause – truly, why would someone who wants to fight against injustice do so by causing injustice?

By asking us to “step back” to look at the issue, she wants to provide a top-down view of what is going on in London, and now in other parts of England.  She wants to blame the structure of society, and act as if this rioting is an act of desperation by people who are victims to this system.

In truth, if we are going to step back to understand the issue we need to start from the bottom-up – these individuals view themselves as victims, in a large part because people like Nina Power tells them they are.  Given that, they don’t feel any obligation to take on responsibility – or to even ask themselves how their own selfish actions have an impact on those around them.

Truly, it is not the free market system we have that requires wholesale change, it is the victim mentality of people in society that needs to change – we can only have a “better society” when the individuals within it are willing to take responsibility for their actions.

Do I believe there is injustice and inequity within society, within institutions, and within government – yes.  But the solution needs to be built from individual responsibility and mutual respect, not the arbitrarily defined institutional structure suggested by intellectuals and columnists.