When Google bought Motorola for $12.5 billion last year, tech pundits had a ton of theories for what the move was really about.
"Google is going to use Motorola's cable box business to force Google TV on people," they said. (Nope, Google sold off Motorola's set-top box business for $2.35 billion.)
"It's all about protecting Android with Motorola's patent portfolio," others said. (Yes, but it seems like Samsung is the one leading that effort for now.)
However, what people weren't saying, including Google, was that the Motorola acquisition would mean Google would start making its own phones and tablets, just like Apple does.
Google assured its Android hardware partners like Samsung, HTC, LG, and so many others that Android would remain an equal-opportunity platform, one where everyone will get a shot at making a hero phone. Motorola would be run as a separate entity, Google said when it first announced the Motorola acquisition.
And so far Google has held true to its word. Since the Motorola acquisition, Google has partnered with Samsung, Asus, and LG to make its Nexus-branded line of smartphones and tablets. Motorola has been on its own, making Droid-branded devices like the Droid Razr for Verizon.
Now we have a report from the Wall Street Journal that says Motorola and Google are working together on a new smartphone that will launch next year. The so-called "X Phone" project will be completely separate from the Droid phones Motorola makes for Verizon.
(By the way, we reported back in April that Google was going to start making its own smartphones and tablets with Motorola.)
The move marks a big shift for Google. After denying it intends to get into the hardware business, Google appears to be doing exactly that by using its own hardware company to develop a new smartphone to its exact specifications.
This should also scare the pants off Samsung, HTC, LG, and others that rely on the free, open-sourced Android operating system to make phones that compete with Apple's iPhone. If Google and Motorola make their own phone together, they're instantly turning other hardware manufacturers into competitors, not partners.
And what's to keep Google from restricting the use of Android from its competitors, leaving the latest and greatest software features for its own hardware built by Motorola? What are the other guys supposed to do?
One solution we've heard Samsung and others are considering is to fork Android to their own specifications. That means modify Android beyond recognition and sell apps and content through their own online stores.
This is the same thing Amazon does with its Kindle Fire tablets. The Kindle Fire runs a heavily modified version of Android with all things Google stripped out. Amazon even uses Microsoft's Bing as the default search engine.
If Google gets serious about making its own hardware, you can expect Samsung, HTC, and all the others to do the same thing as Amazon.
On February 28, Axel Springer, Business Insider's parent company, joined 31 other media groups and filed a $2.3 billion suit against Google in Dutch court, alleging losses suffered due to the company's advertising practices.
