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Google to sell Motorola to China's Lenovo for $2.9 billion

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News_Editor Star Member

News_Editor

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MOUNTAIN VIEW, CALIFORNIA (BNO NEWS) -- Internet giant Google, Inc. on Wednesday confirmed it has signed an agreement to sell its Motorola division to China's Lenovo Group for $2.91 billion, just over two years after it bought the telecommunications company for $12.5 billion.

"We've just signed an agreement to sell Motorola to Lenovo for $2.91 billion," Google CEO Larry Page said in a statement. "The smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices. It's why we believe that Motorola will be better served by Lenovo."

Page added: "This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere. As a side note, this does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry."

(Copyright 2014 by BNO News B.V. All rights reserved. Info: [email protected].)

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moradave Senior Member

moradave

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I have a 2 year old Lenovo laptop. In addition to making good products, looks like they are also astute business people. Happy to see them get into mobile products. I think they will do well.

Edited by moradave
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yankee99 Platinum Member

yankee99

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that is a serious loss... did google stock plummet after this ?

guess they way they will play it : just give less advertisement share to the people who make them rich

Not really and it will most likely go up on this news not down...

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Chicog Star Member

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I suppose Google secured the patent portfolio for Android platform with the purchase and then sold the manufacturing to Lenovo.

You got it right. Not the disaster it appears on paper, and if Lenovo start churning out millions of decent Android handsets, it only helps Google, too.

Google will retain about 15,000 of the 17,000 patents it acquired as part of its original deal for Motorola, and will grant Lenovo a license to use certain ones. Analysts have described the patents as the most valuable part of the acquisition, worth several billion dollars alone because they are firepower for Google to defend its Android mobile operating system.

Although Lenovo shares were down 8% by lunchtime!

biggrin.png

Edited by Chicog
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casualbiker Platinum Member

casualbiker

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Moradave.. Lenovo have been making phones for years

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

Yes, but not Motorolas with Android. I admit I never saw or heard of a Lenovo mobile phone.

You said mobile products!

There ya go.. lots to look at :D

http://www.lazada.co.th/shop-mobiles/lenovo/

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

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folium Platinum Member

folium

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Moradave.. Lenovo have been making phones for years

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

Yes, but not Motorolas with Android. I admit I never saw or heard of a Lenovo mobile phone.

Check this out re Lenovo's share of the smartphone market.

http://www.economist.com/news/economic-and-financial-indicators/21595492-global-smartphone-shipments

Lenovo is swiftly gaining market share, and while having only 5% share of global market this deal will help in its ambition to grow this rapidly.

http://www.businessweek.com/articles/2014-01-30/lenovo-takes-on-apple-and-samsung-in-smartphone-market

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NeverSure Star Member

NeverSure

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Android is open source and free to use. Google developed it because they were afraid the IPhone would dominate the market and make Google search unavailable on it. As more and more people went to smartphones and tablets, Google developed Android and gave it away.

Google does have a lot of patented content on the common versions of Android such as Gmail, maps, search, and much more, so they keep working to maintain control of Android in that way especially now that Android rules the market. If a manufacturer just put the open source part of Android on a smartphone, it wouldn't do much without the Google store.

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Chicog Star Member

Chicog

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The Register seem to think Google will end up making money on the deal:

At first glance we've the set-top business, the handset one and the patents. At that first glance it would appear that Google has paid $12.5bn in total, flogged off the two physical businesses for $5.5bn and thus paid $7bn for the patents.

However, if we add in the $3bn cash (possibly retained) and the $6.5bn in tax losses (certainly some used, possibly the rest retained) we can, with a good deal of guessing I agree, make the case that Google has actually made a couple of billion profit on the deal and got those patents for free. It all depends on how good the tax lawyers are and who really wants to posit that Google employs bad ones?

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casualbiker Platinum Member

casualbiker

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Nexus 5 are LG phones

Exactly. So Google's newest phone wasn't a Motorola anyway. I don't know why, I just know it is a Nexus 5.

Google's intention was to run Motorola as a stand alone "Google " company. Using the assembled in USA to bring customers in.. US customers being fickle didn't want to pay the relative high price for the X. Hence the price cuts and promotions. And now Motorola the father of Mobile phones is no longer American but Chinese. The funny thing is those customers that DID buy the X love it. And at the current price it's a relative bargain.

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

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