Google selling off Motorola’s handset business to Lenovo

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Back in August 2011 Google took the bold step of bailing out Motorola Mobility from its deathbed and gave it a lifeline with its $12.5 billion buyout. Fast forward to 2014 and Motorola  is neither doing so well nor is it doing so bad.

At first when Google bought it we all fretted over the future of Android. Would Google prefer its own over its traditional hardware partners like Samsung, LG, Sony and others? We were soon to find out that Google would let Motorola be. The company took long to get in the “Google way” but when it eventually did, we all saw the fruits and Google’s touch.

The Moto X received rave reviews for the build quality and the MotoMaker that changed the dynamics of smartphone customization. The Moto G changed the paradigm as far as device pricing goes. Motorola showed us that stock or near stock Android was still as attractive as ever and that outside the traditional Nexus showcase, it was not just another skeleton.

However the question we should all be asking ourselves is, is that enough? Is that what Google had in mind when it acquired the company? Was it simply after Motorola’s huge patent portfolio or was it out to help another partner facing financial difficulties? Definitely not help.

Earlier reports appearing in the China Daily and also captured by Reuters had it that Lenovo had been in secret talks with Google with an aim of taking over the American company. According to both the China Daily and Reuters, Lenovo was on the verge of a $2-3 billion buyout of Motorola’s handset business from Google. We can now confirm that Google is indeed selling off Motorola to Lenovo for $2.91 billion.

Why would Google sell Motorola at a throwaway price of just a fraction of the $12.5 billion it paid for the company almost three years ago? Maybe Google wants to continue being the impartial guy it has always tried to be in matters Android. In fact CEO Larry Page writes that “this is an important move for Android”.

It should not be lost on us that Google is just from signing some patent sharing agreements with Samsung that are rumoured to have put the Korean device maker on notice over its seeming divergence from delivering the Android experience as Mountain View intended. What Google and Samsung agreed to is not known to anyone besides the two parties but the emerging reports of Motorola’s disposal could be results of such closed door agreements and commitments to share patents between them. Is that a good thing?

Yes and no.

Yes because, all OEMs are now on the same page, literally. That means Android is safe and every one working on side projects for a rainy day can feel part of the party (hello Tizen).

No because Motorola is just catching on after sinking into oblivion and losing its global appeal several years ago and if Google had given it the greater attention it deserved (maybe throw in a Nexus), things would’ve been different financially since the company had already had a footing with the hardware and the software (near stock, useful, timely updates). We all lusted after the Moto G. Cheap phone with good specs.

Only Motorola has so far had the guts to take the market in such a direction as far as the big brands are concerned. Perhaps it is failure by Motorola to return to profitability quickly that has made Google reconsider its decision to acquire it. Still with Lenovo’s aggression, like Page notes in his blogpost announcing the sale, Lenovo has all that it takes to move Motorola in the right direction even as it seeks to re-position itself as the go-to brand in the American market through Motorola.

Lenovo has the expertise and track record to scale Motorola into a major player within the Android ecosystem. They have a lot of experience in hardware, and they have global reach.

Lenovo is very aggressive when it comes to expanding to other markets in the world. Only last week Lenovo bought IBM’s low-end server business for $2.3 billion. Back in 2005 it bought IBM’s personal computer business (the ThinkPads). Last year, Lenovo was one of the companies tipped to acquire a stake in HTC . It was also rumoured to be one of the companies that were in line to acquire Blackberry has its board not backed out of plans to sell the company at the last minute.

Of course Google was after Motorola’s patent trove since Page notes that they’ll be keeping a huge chunk of the patents for use to cushion Android as a platform from possible future litigation and patent trolling. Apart from the patents, Google will retain the Motorola Advanced Research team, the custodians of Project Ara, the next level of smartphone customization that Motorola was working on to take its MotoMaker to the next level.

 

Source: Motorola, Google

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