Mobile By James Plafke Jan. 29, 2014 5:46 pm
It was just less than three years ago that Google purchased Motorola Mobility to the tune of $12.5 billion. At the time, speculation suggested that Google wanted to break into the handset business in a bigger way, but the undercurrent of the deal suggested that Google actually just wanted Motorola’s patent portfolio more than it wanted Motorola to make phones under the Google flag. Now, Google officially sold off Motorola to Lenovo for a little less than one-fourth of the that initial purchase price.
A little over one year ago, Google sold off Motorola’s set-top division, Motorola Home, for $2.5 billion. With this sale of Motorola Mobility, that shaves another $3 billion ($2.91 billion, exactly) from that initial $12.5 billion purchase made in 2011, bringing the total cost of the initial purchase down to $7 billion. Interestingly, Google isn’t completely washing its hands of Motorola now that Lenovo is the new owner. The company has licensed the patents to Lenovo, and still gets to keep the majority of those patents in its (rather formidable) vault.
Google’s purchase of Motorola does now appear to have been focused on securing the company’s patents more than owning a hardware manufacturer, it just came with a potential bonus of having a successful hardware manufacturer if it succeeded. Motorola does make decent hardware — we liked the Moto X, and we liked it even more when it got Android 4.4 Kitkat — but it appears as though it did not succeed enough to withstand an offer of three billion dollars.
As for why Lenovo would purchase a smartphone company that Google sold off less than three years after purchasing it, that’s likely so Lenovo’s smartphone business can gain footing in North America. So far, the company has only really been able to break into the computer market, thanks to its purchase of the legendary IBM PC brand — all those laptops your coworkers use with the little red mouse nubbin embedded in the middle of the keyboard. People that have managed to get ahold of Lenovo’s smartphones have regularly suggested that they’re solid in quality, but regardless, it’s tough to break into the saturated Western market. Furthermore, the deal grants Lenovo a license to Motorola’s patent portfolio, as well as other intellectual property.
For now, the surface outcome of this deal seems to be that Google got to buy up all those patents for $7 billion instead of $12.5 billion, and Lenovo is making its way to the Western smartphone market.
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A little over one year ago, Google sold off Motorola’s set-top division, Motorola Home, for $2.5 billion. With this sale of Motorola Mobility, that shaves another $3 billion ($2.91 billion, exactly) from that initial $12.5 billion purchase made in 2011, bringing the total cost of the initial purchase down to $7 billion. Interestingly, Google isn’t completely washing its hands of Motorola now that Lenovo is the new owner. The company has licensed the patents to Lenovo, and still gets to keep the majority of those patents in its (rather formidable) vault.
Google’s purchase of Motorola does now appear to have been focused on securing the company’s patents more than owning a hardware manufacturer, it just came with a potential bonus of having a successful hardware manufacturer if it succeeded. Motorola does make decent hardware — we liked the Moto X, and we liked it even more when it got Android 4.4 Kitkat — but it appears as though it did not succeed enough to withstand an offer of three billion dollars.
As for why Lenovo would purchase a smartphone company that Google sold off less than three years after purchasing it, that’s likely so Lenovo’s smartphone business can gain footing in North America. So far, the company has only really been able to break into the computer market, thanks to its purchase of the legendary IBM PC brand — all those laptops your coworkers use with the little red mouse nubbin embedded in the middle of the keyboard. People that have managed to get ahold of Lenovo’s smartphones have regularly suggested that they’re solid in quality, but regardless, it’s tough to break into the saturated Western market. Furthermore, the deal grants Lenovo a license to Motorola’s patent portfolio, as well as other intellectual property.
For now, the surface outcome of this deal seems to be that Google got to buy up all those patents for $7 billion instead of $12.5 billion, and Lenovo is making its way to the Western smartphone market.
More...
