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Google sells Motorola Mobility to Lenovo for $3bn, retains patents

Moto flipping patent hauler
Thu Jan 30 2014, 09:25
Motorola Moto X with Android 4.4 Kitkat

ANDROID DEVELOPER Google sold Motorola Mobility to Lenovo for just short of $3bn on Wednesday, making the Chinese computer maker the third largest mobile manufacturer in the industry.

Lenovo is acquiring Motorola phones like the Moto X, and whatever future handsets it comes up with. The company got mobile phone maker for something of a knocked down price by paying $2.9bn, about $9.5bn less than Google paid for Motorola

Google put a good spin on it, and CEO Larry Page said that the sale is good news for Android and its users.

"Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem," he said. "This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere."

That is not the only positive for the firm of course, and it has retained the extensive patent portfolio that Motorola Mobility had accumulated over decades. These, Google said, it will license to Lenovo, along with 2,000 other patents. Google will also keep hold of Motorola's Advanced Technology unit responsible for the modular Project Ara device

Lenovo is happy with its successful acquisition.

"We will immediately have the opportunity to become a strong global player in the fast-growing mobile space," said Lenovo chairman and CEO Yang Yuanqing.

"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."

Google's $12.5bn purchase of Motorola Mobility bought a library of around 16,000 patents, but that came with some problems.

Costs associated with the transition and related severance payments increased by nine percent and Google admitted that it had some work to do. With this deal it appears to have shed the firm's market risk but not its money making patents.

Strategy Analytics summed up the deal in a blog post. "For Lenovo, it is a good move. The Chinese vendor gets access to the valuable US smartphone market and the fast-growing Latin America region. This complements its existing global PC business. For Motorola, it gains access to an ambitious sugar daddy that has a strong presence in the huge China market," it said.

"For Google, it divests a loss-making hardware division." µ

 

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