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Google sells Motorola arm to Lenovo

Google sells Motorola arm to Lenovo

Google has sold the bulk of its 2011 Motorola Mobility acquisition to Lenovo at a considerable loss, but retains selected portions including patents and the Project Ara R&D arm.

Google has surprised investors with the news that it is to sell its Motorola Mobility division, purchased back in 2011, to Lenovo at a considerable loss - but claims it's keeping enough back to make the investment worth the deal.

Google completed its acquisition of Motorola's mobile arm, signalling that company's exit from the smartphone, tablet, cable modem and set-top box markets, back in November 2011 in a deal valued at $12.5 billion. In December 2012, following office closures that lost 4,000 former Motorola staffers their jobs, Google announced the sale of the division's cable modem and set-top box arms for $2.35 billion but retained the core focus of smartphone development.

Since then, Motorola has released just two major products: the Moto G and Moto X smartphones, both - unsurprisingly - running Google's Android operating system. Those, however, could be the last to feature the brand as Google has flogged Motorola Mobility to Chinese technology giant Lenovo for $2.91 billion - an apparent loss of $7.24 billion in under three years.

Google, however, claims that it is in fact gaining from the deal. While most of Motorola Mobility's various assets are heading to Lenovo as a result of the deal, Google is hanging on to the bulk of the company's patent portfolio. Additionally, Motorola's Advanced Technologies and Projects research and development arm is staying with Google and being folded into the Android team.

The latter means Google retains ownership of Project Ara, the Phonebloks-inspired effort to create an open and modular smartphone platform which users can upgrade and modify at their leisure. Originally due to ship development kits by the end of 2013, it's not known how the deal will affect the already very vague release timescale for the project.

For Lenovo, it's a serious commitment to the so-called post-PC era, following the company's decision to sell off its own smartphone and tablet division in 2008 for $100 million, only to change its mind and buy it back a year later for $200 million.

7 Comments

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Instagib 30th January 2014, 11:54 Quote
Is google propping up a potential Chinese competitor of apple there?
rollo 30th January 2014, 12:24 Quote
Has not sold its smartphone side of the business, So not sure how its propping up a potential chinese apple competitor since 60% of apples revenue is the Iphone.
Gareth Halfacree 30th January 2014, 12:35 Quote
Quote:
Originally Posted by rollo
Has not sold its smartphone side of the business
Err... That's exactly what it *has* sold. That's all Motorola Mobility *makes*, since it stopped tablets and Google sold the set-top box and cable modem bits. The purchase, in point of fact, leapfrogs Lenovo into becoming the third-largest smartphone maker in the world, behind Samsung and Apple.
rollo 30th January 2014, 13:20 Quote
Then its lost $8bil on some wonky arangement to challange samsung the leading competitor in china and apple who are not really competing for the same section of the phone market. ( when apple releases a truly budget phone will never ever happen Ill change those words)
Gareth Halfacree 30th January 2014, 14:29 Quote
Quote:
Originally Posted by rollo
Then its lost $8bil on some wonky arangement to challange samsung the leading competitor in china and apple who are not really competing for the same section of the phone market. ( when apple releases a truly budget phone will never ever happen Ill change those words)
I'm sorry, but I have no idea what you're trying to say here. Read the article, come back, and attempt to write down your opinion in a clear manner, 'cos at the moment I have no idea what point you're trying to make.
Instagib 30th January 2014, 15:00 Quote
I think he's getting at Google have lost out in the long run as Apple cater to the high end of the phone market, while making the assumption that any handset that Lenovo make will be in the low end of the smartphone market, and thus will be taking sales from samsung.

That is forgetting google's point if view; any phone sale that isn't apple is a win.

And also forgetting that Lenovo can also do high end products and there is no indication which way they plan to tackle their home market.

Also Google have retained many patents, but without knowing specifically what those patents are, there is no saying how they are being used, or how they plan to use them. That's where the upshot for Google is.
littlepuppi 31st January 2014, 19:59 Quote
As per above, this transaction through all its phases was about ip. Google have retained the ip they were interested and dumped the leftovers on Lenovo, which by virtue of the fact that they are paying money for them will be self serving.
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