Sanjay Ja, CEO of Motorola Mobility, has warned that consolidation is coming in the mobile phone industry, and that it will mainly be in the form of software companies pairing up with hardware companies.
"I’m not convinced that handset manufacturers acquiring other manufacturers is the best way for value to be created for shareholders," he said in an interview with Fortune. "Consolidation across content manufacturers and hardware and software manufacturers–I see a bunch of different ways for this consolidation to occur, to create shareholder value and create different structures to the industry."
Jha pointed to Hewlett-Packard’s acquisition of Palm and webOS as well as Nokia’s partnership with Microsoft on Windows Phone 7 as examples of this.
He said Motorola might be open to the possibility of combining resources with a software company and was not sure if Motorola would remain an independent company. "There are lots of opportunities for us to combine different resources and create more shareholder value," he said.
Interestingly the company who was on top of the phone world 5-6 years ago with the Razr had a warning for Apple.
â€œI’m loath to comment on vulnerabilities of a company that has been incredibly successful in delivering world-class products," he said. "On the other hand, I would say that scale and innovation very often don’t mix. Defence of market share and other defensive actions very often set in, and middle management begins to drive the culture and strategy of a company. I’m certain the folks at Apple are very cognizant and are prepared to make sure that doesn’t occur. But not speaking about Apple in particular, the scale that comes with that level of success is very often the beginning of a decline."
Read more at FierceWireless.com here.