Google has sold Motorola to Lenovo for $2.91 billion
In August 2011, Google shocked the mobile world by announcing that it wanted to acquire Motorola. The deal was finalized in 2012 after many months of waiting for regulatory approval from all the relevant authorities, and today Motorola is changing hands once again.
And once again Google shocks the mobile world as it announces the sale of Motorola to Lenovo for just $2.91 billion. In 2011, Google paid $12.5 billion for the company, so this is a significant difference. That said, Google will still own most of Motorola’s patents after this deal closes, so perhaps the loss isn’t all that large. After all, back when Google acquired Motorola, the main reason was said to be its need for a better patent portfolio to use to defend Android and Android device makers from multiplying patent battles across the world.
Lenovo will get around 2,000 patents as part of the deal, and a license for all the rest, naturally. The Chinese company plans to keep the Motorola brand around, just like it did with ThinkPad after it bought IBM’s PC unit many years ago. Presumably Lenovo will use the Motorola brand to help it more quickly make inroads into such markets as North America, where so far it’s been notably absent from the smartphone space. Lenovo is in the top 5 of smartphone sellers worldwide at the moment, but thanks primarily to its performance on the Chinese market and in a few other countries.
Google’s reasoning for the sale may be for it to be able to focus on software development, and not be considered by other Android device makers as an unfair competitor. The search engine company also gets to stop endlessly pouring money into the Motorola pit with no end in sight – while also getting a cool $3 billion in return. This isn’t a perfect ending for its journey into the hardware realm of the mobile world, but it’s not the worst possible either.
Over the past couple of years we’ve heard many rumors that something like this may happen, that Google only wanted the patents and would quickly sell off the smartphone hardware business to some up-and-coming brand from China (Huawei was once said to be it), but with so much time passing perhaps we all just assumed that Google was in it for the long run. Not so, it seems. Although it could have further used Motorola to push out handsets with ‘pure Google’ software just like the Nexus line, and with great prices like the Moto G, it decided not to for whatever reason. And so, Motorola is off to Lenovo – let’s hope the Chinese company will take good care of it.
The deal is unlikely to be closed anytime soon, since both US and Chinese authorities have to agree to it. In the case of Google’s buying of Motorola that took almost a year. In the meantime, the Google guys will obviously still run things. It’s unclear what this pre-regulatory approval period will do to Motorola’s sales, if people will decide not to buy its wares because of the lack of predictability for example in terms of future software updates (Google just got around to making those a priority at Motorola, now who knows what will happen).
This feels like an odd move right now, but let’s all remember that in 2011 and 2012 when there were rumors of something like this happening it kind of made sense to everybody.