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… it’s an interesting question to say the least. On the front of it many might say it’s an obvious solution for two manufacturers who aren’t doing too well and who really need some sort of push to get them back in the big time. The WSJ puts across some decent arguments, not the least of which is a speculated saving of 10% on operational costs, something that both companies would no doubt love to see.

Market share is another area that apparently makes a convincing case for a merger. Motorola has around 17% of the American market whilst SE has over 12% of the European market and they each have 10% in China and India respectively. Taking the numbers at face value that would seem like a great match-up, all the major markets covered with a strong presence and each would have access to markets where they have traditionally not been so strong i.e. Europe for Motorola and America for Sony Ericsson.

Android is another area where there could be a great conflux of synergy. Both companies are effectively betting their future performance on the success (or failure) of an Android device; Sony Ericsson has the X10 and Motorola has the Droid/Milestone. Up until now HTC has pretty much led the pack when it comes to Android, but a resurgent SE-Moto partnership focusing on Android might see HTC relegated to second place.

So why not? Well as the saying goes, two wrongs don’t make a right. Just shoving two declining companies together doesn’t guarantee success, all it does is generate some headlines and maybe slashes costs. Far more relevant would be how SE and Moto gel as cultures. Who will lead in R&D? Whose ethos will dominate? Whose ideas will come to the forefront? Don’t forget we aren’t talking about two companies joining up and having a cosy relationship, we’re talking about three companies joining up and having a menage-a-trois. Things haven’t always been peachy between Sony and Ericsson if reports are to be believed, is adding a third player into the mix really going to smooth the decision making process? I think not.

Leaving all that to one side for a moment though we are left with a very fundamental point, fewer manufacturers isn’t great for the consumer. I’m not just talking about direct capitalist competition, but competition in ideas. Homogenising the market into fewer and fewer players ends up leaving it with that little bit less diversity and creativity and that’s a price that’s, in my opinion, too high to pay for a 10% saving on operational costs.

This entry was posted on Monday, December 21st, 2009 at 12:08 am and is filed under Opinion. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.