This is the beginning of the end for Android as an open platform. Google will have a financial incentive to release the best phones as Motorola devices. I would not want to be HTC today.
I like how Larry Page talks about IP in the blog post. After all of that talk about how patents were overpriced, Google comes out and spends more money than anyone on acquiring what is basically a terrible handset maker with a large IP portfolio. At the end of the day, Google does what's best for Google.
Google has got to play the game until the rules of the game change. They need patents for protection. Yes, the patents are overpriced, but does Google have a choice?
Android tablets are being pulled from shelves. What should they do? Just concede the market to Apple for the decade or so a serious attempt at patent reform will probably take? They're still not offensively suing anybody.
But it's not clear how Google can break the cycle by themselves. If Google were to say no to patents, without there first being major reforms to the patent system, then they would be slowly squeezed by their competitors patents until they ran out of juice.
It's all about execution. It's not like it hasn't been in HTC/Samsung/Etc's best interest to release the best phones they could. Google showed as much with the Nexus line (same manufacturer, better handsets).
I don't think Google is interested in making profits with hardware sales. It is still about getting Google search into as many hands as possible (and collecting lots of data).
I like how Larry Page talks about IP in the blog post. After all of that talk about how patents were overpriced, Google comes out and spends more money than anyone on acquiring what is basically a terrible handset maker with a large IP portfolio. At the end of the day, Google does what's best for Google.