An end to our expectation on amazing hardware from Google owned Motorola Mobility, as Lenovo has acquired Motorola Mobility smartphone business from Google for $2.91 billon. The hardware division that Google brought in 2011 for $12.5 billion.
With this purchase the Chinese conglomerate Lenovo will get the whole Motorola smartphone business including the Motorola brand and in addition will receive over 2000 patent assets. Google will still maintain ownership of the vast majority of the Motorola Mobility patent portfolio including current patent applications and invention disclosures. Lenovo will receive a license to this portfolio of patents and other intellectual property.
Lenovo will pay Google the $1.41 billion at the time of closing the deal comprised of $660 million in cash and $750 million in Lenovo ordinary shares. The remaining $1.5 billion will be paid in the form of a three-year promissory note. The deal is subject to approval by both US and Chinese authorities.
What’s for Google?
The $12.5 billion acquisition of Motorola Mobility was considered as an expensive mistake from Google. It had acquired Motorola from its vast patents that would save its Android OS and the manufacturing partners from patent infringement lawsuits. But it seems to going in the wrong way leaving Google with little bargaining power.
“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere,” said Larry Page, CEO, Google.
Google has earlier sold the cable box division of Motorola Mobility for $2.4 billion, but retaining the smartphone business. Motorola has lost around $248 billion in the last quarter alone and it still draining the profit from Google. With this deal Google is dumping the loss making asset and going back to its core business of web technology.
According to reports Google will retain the Motorola’s Advanced Technology and Projects group which unveiled the modular phone concept called project ARA and will be integrated with Google’s Android team. The group led by former DARPA director Regina Dugan will now report directly to Sundar Pichai. The current team of 100 people in this division will now move to Google’s Mountain View office. So we can still except something innovative from the Android team in the near future.
What’s for Lenovo
The Motorola acquisition will significantly strengthen Lenovo’s position in the smartphone market. The deal is said to make Lenovo the third largest smartphone vendor after Samsung and Apple, overtaking Huawei and LG. It now has the talented Motorola engineering team along with a vast patent portfolio to work on. It Will also can keep the trademark and copyright for the Motorola brand name.
“The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space.
We are confident that we can bring together the best of both companies to deliver products customers will love and a strong, growing business. Lenovo has a proven track record of successfully embracing and strengthening great brands – as we did with IBM’s Think brand – and smoothly and efficiently integrating companies around-the-world. I am confident we will be successful with this process, and that our companies will not only maintain our current momentum in the market, but also build a strong foundation for the future.” said Yang Yuanqing, chairman and CEO of Lenovo.
What’s for Motorola Mobility
With the deal Motorola will lose the iconic cool factor as a Google company. But with in the Lenovo hands it can expand its reach to global markets. Motorola Mobility enjoys outstanding brand awareness around the world, and is currently the number 3 Android smartphone manufacturer in the U.S. and number 3 manufacturer overall in Latin America.
“As part of Lenovo, Motorola Mobility will have a rapid path to achieving our goal of reaching the next 100 million people with the mobile Internet. With the recent launches of Moto X and Moto G, we have tremendous momentum right now and Lenovo’s hardware expertise and global reach will only help to accelerate this,” said Dennis Woodside, CEO, Motorola Mobility.
So what’s your take on Google selling Motorola Mobility to Lenovo?