The company fears being shut out of smartphone handsets, first by Apple and now Google.
That’s one of the benefits of making your own hardware and software.
Unfortunately for Google (GOOG), who doesn’t make hardware and also wants to supplant Skyhook’s services with its own, dropping Skyhook is more complex and litigious. Google has told its carrier partners (Motorola and company X — likely Samsung) that they would have to drop Skyhook to keep using Android, according to documents Skyhook filed in court.
Google Vice President of Engineering Andy Rubin, according to the suit, called Motorola Co-CEO Sanjay Jha to impose a “stop ship” order, preventing Motorola from shipping Android wireless devices [the Droid X is the device named] featuring Skyhook’s XPS software.
Motorola (MOT) capitulated and went with Google’s location system which it’ll likely argue, just like Apple, is an integral part of their OS experience (unlike search which Google let Verizon (VZ) extract?).
Obviously, Skyhook isn’t pleased with getting dumped and is taking Google to court with damages listed in the tens of millions of dollars. According to Skyhook, it tried to work out a deal with Google but couldn’t come to a solution. Skyhook is also suing for four patent violations.
Skyhook signed a big deal with Samsung in July but that’s likely in jeopardy as well, as Google is moving its Android partners to use its own services, at least in Android phones.