Can Google/Motorola Compete with Apple?

When Google announced they were buying Motorola, it was widely speculated that they did it “for the patents”. Now, Eric Schmidt is reported as saying:

“We did it for more than just patents, .. The Motorola team has some amazing products.”

Of course they did it for more than the patents.

Apple has repeatedly demonstrated what’s possible with integrated hardware and software design. As computing devices have matured, the old “wintel” model of separating things is just not competitive anymore.  I have several friends that live on ecosystem boundaries (OS-to-hardware), and it’s brutal.  The combinatorics alone (supporting a wide range of vendor hardware configurations with a single OS) are hugely expensive.

My bet is that Google will start integrating product design with Android/Motorola.  They’ll still license to other Android partners, but I’m betting the most interesting stuff will come first out of Motorola.  Now the question is:  do they have the design talent?