Chinese PC giant Lenovo has agreed to purchase the Motorola Mobility smartphone division from Google for $2.91 billion (R32.9 billion). For the money, Lenovo gets the MOTOROLA brand, 2 000 patents, along with the full portfolio of Moto’s smartphones and the future product roadmap. As a part of the deal Lenovo also gets a license to Google’s library of patents protecting the Android OS.
Google bought Motorola in 2012 for $12.5 billion (R140 billion) in a move that the search giant called ‘Supercharging Android‘. Google will be hanging onto the treasure trove of some 20 000 patents that it acquired from Motorola as well as the Advanced Technology and Projects group which gave us the Ara modular phone concept last year. The sale of the handset business will also help ease some of Google’s more anxious smartphone partners who had wondered if they could compete if the Android parent started mass producing its own hardware.
By buying the Motorola brand Lenovo gains access to the lucrative US market where Chinese brands have traditionally struggled. It’s a similar strategy to that used for Lenovo’s entry into the PC market when it acquired IBM’s PC business in 2005 and the respected ThinkPad line of notebooks with it.
Since then Lenovo has gone on to become the world’s biggest PC manufacturer and even more recently the world’s fifth largest smartphone manufacturer last year. Lenovo is now the third largest in the smartphone world if you combine its market share with Motorola’s coming in just behind the powerhouse duo of Samsung and Apple. Google’s CEO Larry Page chimed in on the announcement giving Lenovo his stamp of approval saying:
“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem.”
Making smartphones has never been Google’s core focus with Android. The Nexus lines of phones that Google releases have been sold at near cost price making them more of a marketing tool for the latest version of the Android OS than a money spinner for Google. Larry Page’s words hint at the fact that Motorola was more of a distraction for Google than anything else which was more than likely the main reason for the sell off.
“This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere,” – Google CEO, Larry Page
Source: Google Blog