Science and Tech


Google To Sell Motorola Mobility To Lenovo For $2.9B

Google will sell its Motorola handset division to Lenovo, and retain the majority of its patents.
Posted at 10:41 AM, Jan 30, 2014

Computer maker Lenovo is set to acquire Motorola Mobility from Google.

The $2.91 billion deal would net Lenovo Motorola's stable of smartphones, present and future. Google is holding on to almost all of Motorola's patents, and its advanced hardware division. That team will be integrated into Google's Android staff.

An analyst tells the Wall Street Journal Lenovo now has a shortcut into the US market.

"It not only gives them the channels, but also with that patent portfolio that Google has, and their ability to license from that gives them that ability to compete on a fair ground in that space."

Google is cashing out for a quarter of the $12.5 billion it shelled out for Motorola when it acquired the company in 2011. Those are some expensive patents. (via Engadget)

But Silicon Angle points out Google got $5.6 billion in cash and deferred tax assets as part of the 2011 deal; and sold Moto's set-top box division for $2.3 billion. All told:

"With the sale of Motorola to Lenovo, that means Google spent under a billion dollars for a bunch of patents it previously valued at $5.5 billion – not such a bad deal when you look at it that way."

Still, there's no getting around the fact Motorola hasn't done well under Google's wing.

"Since they invested, revenue has just gone down. It's declined ever since they got in. In fact, last year's loss was to the tune of almost $1 billion." (Via Bloomberg)

Lenovo's CFO tells CNBC his company plans to turn Motorola around. Instead of making boutique phones like Google did, Lenovo intends to scale production back up.

"With Lenovo, which is very good in terms of operational efficiency, I think is a good base for us to go into mature markets, as well as other markets Motorola is strong at."

And Google is now free to focus on its Android platform and its existing partners.

Ars Technica explains Motorola put Google in direct hardware competition with Android licensees like Samsung. It likened the balancing act to a mobile cold war of sorts.

With hardware out of the picture, Google and Samsung can cooperate — the two even signed a patent cross-licensing deal earlier this week. (Via The Wall Street Journal)

The Lenovo-Motorola deal, meanwhile, doesn't have a set deadline for closure. Acquisition is still subject to approval from regulators in the U.S. and China.