Looking AHEAD

Updated: Feb 10 2014, 08:26am hrs
Microsoft's decision to transform itself from a software-based company to a hardware one and Sony's announcement of plans to sell its PC division should be seen in the same light. The ongoing decline in PC sales has hurt both companies as they are tied deeply with the software and hardware ends of that industry, respectively. The two companies have responded to these pressures in a similar manner as well. Microsoft decided to focus more on hardware, gaming consoles, smartphones and tablets, exactly the same divisions Sony will boost after selling off its PC division. These moves make sense, at least looking at current trends. The smartphone and tablet markets have been growing tremendously, and there's every indication that this growth will continue for a while. The PC market has been shrinking, and there's an equally clear indication that it will continue to do so. But basing strategic decisions on current trends is hardly a good way to achieve superlative growth.

Google, however, headed a different way. In 2011, it bought Motorola

Mobility for $12.5 billion, signalling its entry into the mobile hardware market. On January 29, 2014, however, it announced that it was selling Motorola to Lenovo for $2.91 billion. However, CEO Larry Page said that Google would retain "the vast majority of Motorola's patents". It is highly likely that the large discrepancy between Motorola's acquisition price and selling price is due to the importance Google places on those patents. As to why Google wants to retain so many mobile tech patents when it is selling the hardware division, the answer probably lies in the rapid advances the company is making in wearable technologya market that is gaining traction. Google, unlike Microsoft and Sony, is looking to the future.