Filip Novotny Just two and a half years after buying Motorola, Google decided to leave this business to another owner. China's Lenovo is buying Google's smartphone division for $2,91 billion.
In 2012, it seemed that Google was fully entering the field of smartphone manufacturers. For the astronomical sum of 12,5 billion dollars at the time took over a significant part of Motorola. Two years and two mobile phones later, Google is giving up on this manufacturer. Although both the Moto X and Moto G smartphones have received positive reviews from reviewers, the Mobility division's revenue has been declining year over year, and Google is losing about $250 million a quarter due to it.
Endless overwork is also apparently one of the possible reasons for the sale. His announcement was made just one day before a regular meeting with investors who have been skeptical about Motorola for a long time. According to financial indicators, it now appears that her sale has met with a positive response. Google shares rose two percent overnight.
Another reason for the sale may also be the fact that Google sees no point in continuing the Mobility division. There has been public speculation since 2012 that Motorola's purchase was for reasons other than a growing interest in hardware. This company owned 17 technological patents, mainly in the field of mobile standards.
Google decided to expand its legal arsenal due to the growing tension between different manufacturers and platforms. Larry Page himself confirmed it: "With this move, we wanted to create a stronger patent portfolio for Google and great phones for customers." writes company director on the company blog. Motorola's acquisition came only a few months after Apple and Microsoft they invested billion in Nortel's patents.
According to the agreement between Google and Lenovo, the American company will retain two thousand of the most important patents. Protection from lawsuits is not important for the Chinese manufacturer. Instead, it needs to strengthen its position in both Asian and Western markets.
While Lenovo is not an established brand in terms of mobile phones in our market, it ranks among the largest manufacturers of Android smartphones in the world. This success is mainly due to strong sales in Asia; in Europe or America this brand is not very attractive today.
It is the acquisition of Motorola that could help Lenovo finally establish itself in important Western markets. In Asia, it will also be able to better compete with the dominant Samsung. For this option, it will pay $660 million in cash, $750 million in stock and $1,5 billion in the form of a medium-term bond.
Lenin's scipajuca Motorola will be good. :-)
That was predictible. Anyway, I think that Google lost a lot on this even though it owns the patents. They will use it better in Lenovo.