Light Reading

Lenovo to Buy Motorola From Google?

Sarah Thomas
1/29/2014
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Google is reportedly looking to offload its recently acquired Motorola Mobility division to the Chinese smartphone maker Lenovo, according to reports Wednesday afternoon.

Sources told Reuters and China Daily that Lenovo Group Ltd. (Hong Kong: 992) is looking to purchase the handset maker from Google (Nasdaq: GOOG). According to China Daily, the deal could be announced as soon as tomorrow. Reuters suggests the deal is worth nearly $3 billion. China Daily pegs it at it more than $2 billion.

Buying Motorola Mobility would give Lenovo a much bigger operation in the US. For Google, it would be a way to offload a unit that's been operating at a loss, though the Android maker would also have to give up the division's 10,000 patents. Google acquired Motorola Mobility in 2012 for $12.5 billion. (See Android's Chinese Challengers and Google Closes $12.5B Motorola Deal.)

UPDATE: Google officially announced the sale of Motorola Mobility to Lenovo for $2.91 billion. Google will retain ownership of the "vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures." Lenovo will receive a license to the patents and other IP, along with 2,000 patent assets and the Moto brand and trademark portfolio, the companies said.

In a blog post, Google CEO Larry Page wrote that the sale would allow Google to devote its energy to driving innovation across the Android ecosystem:

    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. In addition, Lenovo intends to keep Motorola’s distinct brand identity -- just as they did when they acquired ThinkPad from IBM in 2005.

— Sarah Reedy, Senior Editor, Light Reading

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SarahReedy
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SarahReedy,
User Rank: Blogger
1/30/2014 | 3:56:01 PM
Re: It's official
So true. They just got to move from the burbs to a great new spot in the city. Now what?!
derac7020
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derac7020,
User Rank: Lightning
1/30/2014 | 3:51:07 PM
Re: It's official
I'm guessing the folks still working at MOT in Chicago aren't all that excited about it either.
SarahReedy
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SarahReedy,
User Rank: Blogger
1/30/2014 | 3:29:12 PM
Re: It's official
I didn't think Samsung ever really left?

It seems like a crazy decision, but I suppose it's really not when you break down the numbers and consider Google's MO as you've all mentioned. Could be a positive for everyone except HTC!
derac7020
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derac7020,
User Rank: Lightning
1/30/2014 | 11:36:17 AM
Re: It's official
Factor in the sale to Arris and cash and it gets closer to that $5M number Google originally discussed about the patents.   They got Samsung to come into the Android fold again, too.
DanJones
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DanJones,
User Rank: Blogger
1/30/2014 | 11:26:19 AM
Re: It's official
Are the patents worth, what, $9 billion though? 
sam masud
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sam masud,
User Rank: Light Sabre
1/30/2014 | 11:07:09 AM
Re: It's official
From what I understand, it is a good thing the decision to buy MM was made by Larry Page hisself--otherwise head(s) would have rolled for buying high and selling slow. Perhaps what Google really wanted was the Motorola patents, which it's mostly keeping.
DOShea
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DOShea,
User Rank: Blogger
1/29/2014 | 10:23:43 PM
Back to the future
Someone just made the case to me that Lenovo is doing the same thing as it did when it was looking for a leg up in the laptop business. Back then, it bought IBM's ThinkPad line and ran with it. Can it do the same with another big brand in the smartphone sector?
Liz Greenberg
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Liz Greenberg,
User Rank: Light Sabre
1/29/2014 | 7:14:10 PM
Re: It's official
You are right Sarah.  Google is fundamentally not a hardware company.  I would expect that even Google Glass will eventually be licensed to others. Google is an ideas and software company that focuses on disruption and the bottom line.  The patent portfolio makes more sense for them than the actual Motorola name and hardware.
DanJones
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DanJones,
User Rank: Blogger
1/29/2014 | 6:30:16 PM
Re: It's official
In fact Strategy Analytics is already saying that the buy could make Lenovo the 3rd largest smartphone vendor in the world with, er, 6% market share:

http://blogs.strategyanalytics.com/WSS/post/2014/01/29/Motorola-and-Lenovo-Become-Worlds-3rd-Largest-Smartphone-Vendor.aspx
SarahReedy
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SarahReedy,
User Rank: Blogger
1/29/2014 | 6:06:08 PM
Re: It's official
And it really does seem like it was all about patents in the end. Google cited some of its Moto phone launches, but it really never leveraged it as much as it could. Its Android ecosystem of partners is the cause of that, but still, Moto never did much for it, but maybe its patents still can.
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