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Google Sells Motorola Mobility To Lenovo For $2.91 Billion

Posted by Soulskill on from the experiment-over dept.

_0x783czar writes "Google today announced that they will be selling Motorola Mobility to Lenovo for the sum of $2.91 billion USD. Google says the move should allow the company to receive the attention and focus it deserves in order to thrive. From the announcement: '[T]he 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 — which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.' Google was quick to add that this does not signal a move away from their other hardware projects. Additionally Google will 'retain the vast majority of Motorola's patents,' which they hope to continue using to stabilize the Android ecosystem. The deal has yet to be approved by either the U.S. or China."

27 of 172 comments (clear)

  1. ouch! by Anonymous Coward · · Score: 3, Informative

    That's gonna leave a mark. A -$10 billion mark!

    captcha: failure

    1. Re:ouch! by mythosaz · · Score: 4, Interesting

      Yeah. I need to get in the middle of one of these transactions somehow.

      Google seems willing to pay 10B to rent companies for a while...

    2. Re:ouch! by MrEricSir · · Score: 5, Insightful

      Google seems willing to pay 10B to rent companies for a while...

      They didn't "rent" anything -- they paid $10 billion for Motorola's patents. The rest wasn't worth much to them.

      --
      There's no -1 for "I don't get it."
    3. Re:ouch! by alexander_686 · · Score: 5, Informative

      Yes, spot on.

      17,000 patents, plus another 7,500 pending. Also, the patents were higher quality patents, so it just was not the numbers.

      http://en.wikipedia.org/wiki/M...

    4. Re:ouch! by bob_super · · Score: 4, Interesting

      Actually, owning Moto put them in an uncomfortable situation with the other Android phone makers.
      If Google doesn't make hardware phones, there's less incentive to go fork your own android.

      So they paid 10 billions for patents, give Moto to someone who can both invest in it and leverage the Chinese market, and avoid a war with their customers.

      Decent deal.

    5. Re: ouch! by AvitarX · · Score: 5, Insightful

      Not at all, Motorola seems to be making better phones now, and Google has the parents. I assume the purchase was very hedging, in case android as an ecosystem didn't take off, they could try to make them alone. The need to hedge is over, Google gets some money, and a company that has proven it's ability to manage american brands is in the mix.

      Google can now release moto based nexus items (if they dream moto to be good for it), without threatening the ecosystem.

      The hedge on android probably was worth it to them.

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    6. Re:ouch! by AuMatar · · Score: 5, Informative

      Not really. They sold various other parts in the past for cash, and got tax writeoffs. Forbes estimates it only really cost them 1.5 billion in cash. With this deal they made money, and likely kept the patents.

      http://www.forbes.com/sites/ti...

      --
      I still have more fans than freaks. WTF is wrong with you people?
    7. Re:ouch! by swillden · · Score: 5, Informative

      Google seems willing to pay 10B to rent companies for a while...

      They didn't "rent" anything -- they paid $10 billion for Motorola's patents. The rest wasn't worth much to them.

      According to this Google+ post, it wasn't that bad. Motorola came to Google with $5.6B in cash and deferred tax assets, plus Google recovered some more of their money by selling the set-top box business ($2.35) and some factories ($75M), and finally the sale price to Lenovo ($2.91B).

      So the net cost was about $1.56B. For that Google got most of the Motorola patents and Motorola's advanced products group. Good deal? Bad deal? You decide.

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    8. Re: ouch! by ifiwereasculptor · · Score: 5, Insightful

      Not at all, Motorola seems to be making better phones now

      WAY better phones. In fact, except for problems like no SD card slots or removable batteries, I think they're making arguably the best phones in the market. Moto X is no Optimus G2 in terms of speed, but it's plenty fast, its battery lasts the whole day and it has brought something new to the table: voice commands. I think it's pretty useless, but at least it's something new. Notifications that take advantage of the AMOLED display were also cool. Moto G is simply the best value for money right now, it's putting every other phone maker to shame. Both can take a fall and are already running KitKat. If you remember Motorola had the Razr HD going against Samsung's Galaxy S3, you can recognize they improved Motorola's game immensely. Maybe Lenovo will carry the momentum, but I fear not. It's a shame, because I really liked where Motorola was going.

    9. Re: ouch! by icebike · · Score: 4, Insightful

      Not at all, Motorola seems to be making better phones now, and Google has the parents. I assume the purchase was very hedging, in case android as an ecosystem didn't take off, they could try to make them alone. The need to hedge is over, Google gets some money, and a company that has proven it's ability to manage american brands is in the mix.

      Google can now release moto based nexus items (if they dream moto to be good for it), without threatening the ecosystem.

      The hedge on android probably was worth it to them.

      Android had already captured about 75% of all hanset sales by the time the Moto Buy happened.
      So I don't think they were hedging.

      However, you might have hit the mark after all, in a slightly different way: Preventing Android from being eroded.

      Its entirely possible there was a quietly brewing manufacturer revolt going on due to Google competing with its user base by manufacturing phones.
      Samsung leaked a Tizen Phone, and Mozilla funding a phone OS (paid for by Google, as is 95% of everything Mozilla does), and the Chinese also brewing up a phone OS, it might have come to Google's attention that getting rid of Moto might have been the best choice.

      They keep the patents, secure Android's future, and already pocketed the tax write off when acquiring Moto's debts. Win, Win, Win.

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      Sig Battery depleted. Reverting to safe mode.
    10. Re: ouch! by DuckDodgers · · Score: 4, Insightful

      I could have sworn I read somewhere that the CEO of Motorola had been threatening to use Motorola's patent portfolio to sue other manufacturers selling Android devices. So supposedly the top reason Google bought them was to prevent them from adding a Motorola Android Tax on top of the Microsoft Android Tax and Apple Android Tax.

      Conversely, the biggest problem with the purchase for Google is that it could make the other Android device manufacturers nervous that Google would give Motorola preferential treatment. In turn, they might contemplate a jump to Windows Phone, Samsung's Tizen, or the Chinese fork of Android called Aliyun.

      So to me, what Google did here may have been expensive, but I can see the logic behind it. They stop Motorola from extorting the other Android device makers. They move Motorola's devices from 'suck' to 'decent'. They strengthen their own patent portfolio in the Intellectual Property Legal Wars. Then they sell off Motorola so that it's clear they won't screw the other Android vendors to strengthen the brand they own.

    11. Re:ouch! by icebike · · Score: 4, Informative

      Its actually the other way around. Google is keeping all but 2000 patents (some sources indicate over 10K) and licensing them to Lenovo, and no doubt cross licensing those 2000 back from them.

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      Sig Battery depleted. Reverting to safe mode.
    12. Re:ouch! by teg · · Score: 3, Insightful

      That said, the Motorola purchase seems particularly insane, the only logical reason for Google to make that purchase was to build their own phone which is something they didn't even try.

      "Patents"..

    13. Re:ouch! by cbhacking · · Score: 3, Interesting

      Pretty sure Microsoft will only shut down the Nokia handset manufacturing (there's more to Nokia than that, but I don't have a handy name for it like "Motorola Mobility") if they decide to abandon the smartphone OS business entirely. Which they could do, admittedly, but I'd be surprised. They've achieved a pretty solid third place in the market, with an overall marketshare similar to that of OS X among PCs. They've started being taken more seriously by major app developers. They're rolling out updates at a decent rate, and many of the crippling issues of the app model in WP7 are already fixed.

      That doesn't mean they won't spin off or re-sell that portion of the business, of course. I'd be surprised if they just killed it though, unless they want to give up on phone OSes entirely. There are at least three other OEMs making WP8 handsets (HTC, Samsung, and Huawei), but the Nokia Lumia line predominates.

      --
      There's no place I could be, since I've found Serenity...
    14. Re: ouch! by andydread · · Score: 4, Informative
      Well Microsoft:

      1) did say in their internal documents that they intend to use software-patents as a way to "add a cost" to open source software especially Linux and anything based on Linux.

      2) Microsoft funds, and arranges for funding through Baystar Capital and RBC Canada for SCO's failed legal assault on Linux.

      2) Microsoft signs "Linux Patent License" deal with Novell and Xandros. Claiming it's all in the name of "interoperability"

      3) Later Microsoft CEO Steve Balmer claims (without proof) that Linux violates 235 Microsoft software-patents.

      4) Microsoft begins extracting a "Linux License" tax from device vendors such as Nas Maker Buffalo and some printer manufacurers and other device manufacturers.

      5) Android comes on the scene. Microsoft widens their "Linux License" program to include Android. However they still collect on a "Linux License" for servers from Amdocs and Amazon among many others.

      Microsoft is basically implementing what they always planned to do. Use trivial and obvious software-patents to destroy FOSS in the marketplace. The patent welfare is just a beneficial side-effect and i'm sure it helped to pad their most recent record earnings.

  2. Google is keeping all the IP... by Red+Herring · · Score: 3, Informative

    Considering the $4.5B that the Rockstar group paid for ~4000 mobile-related patents, and that Google is keeping the "Vast Majority" of the Motorola patents, the bulk of the price difference may well be in the IP.

    A quick google didn't quickly give me a number for how many patents Google is keeping, but if Lenovo is getting about 2000 patents, and that is not the "Vast Majority", then there are a LOT of patents.

    I gotta get me some more patents.

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    #include "standard_disclaimer.h"
    1. Re:Google is keeping all the IP... by jonwil · · Score: 4, Insightful

      Given that Motorola (through the StarTac, DynaTac and MicroTac litterally INVENTED the mobile phone as we know it today, it makes sense that they would have a big patent portfolio.

  3. Google shift in strategy, make others build better by SuperKendall · · Score: 4, Interesting

    As much as they might say they are still building hardware - obviously not to the same degree.

    Instead Google is focusing on making other hardware makers produce better Android devices, the evidence of which is the smack-down Google gave Samsung at CES.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  4. A great American company sold to China by jmcbain · · Score: 4, Insightful

    Motorola has a distinguished history as a great American company. It was founded in 1928 and outlasted all its electronics contemporaries from that era, including RCA and Dumont. It had a great hit in the Razr (the iPhone before the iPhone). Now Google has sold Motorola to China.

    1. Re:A great American company sold to China by adolf · · Score: 5, Interesting

      Motorola has a distinguished history as a great American company. It was founded in 1928 and outlasted all its electronics contemporaries from that era, including RCA and Dumont. It had a great hit in the Razr (the iPhone before the iPhone). Now Google has sold Motorola to China.

      Nope.

      Motorola Solutions is still based in the Illinois, making top-tier wireless communications gear for commercial and public safety sectors.

      All that has been sold to China is what used to be the Crappy Consumer Products/Race to the Bottom division of Motorola:

      --
      Kid-proof tablet..
  5. That explains the Samsung deal by jonabbey · · Score: 4, Interesting

    Well, that nicely explains why Samsung announced that they were willing to work more closely with Google to make Samsung phones cohere to Google's direction with Android.

    --
    - jon

    Ganymede, a GPL'ed metadirectory for UNIX
  6. Re:WTF by oodaloop · · Score: 5, Informative

    Maybe you missed the part about them keeping the patents. This is part of their strategic goals of supporting Android without having to bother with managing a phone company.

    --
    Tic-Tac-Toe, Global Thermonuclear War, and relationships all have the same winning move.
  7. Wow. Major shopping spree by msobkow · · Score: 5, Interesting

    That's a pretty big shopping spree Lenovo has been on. I sure hope it pays off for them -- I like their hardware, despite all the naysayers out there, I've never had problems with their stuff yet.

    --
    I do not fail; I succeed at finding out what does not work.
  8. This was always the point by __aagmrb7289 · · Score: 5, Insightful

    This was always the point of the purchase. Google needed those patents to defend themselves. They bought the company to get the patents, and now that they've decided which ones matter, they are passing along the rest of the company to someone who cares. They got what they wanted, paid the price they felt was worth it, and are now happily sitting with patents that they can use to counter attacks by other patent holders in the smart phone market. I believe there was intense speculation about this being the motive when we first discussed this purchase on Slashdot.

  9. Good for Android... not sure about Motorola by jareth-0205 · · Score: 3, Interesting

    Gotta say this is probably a better state for Android to be in from a "standard platform" point of view, a company making hardware and licencing its software to other hardware manufacturers hasn't work out very well in computing in the past. Either own the lot (Apple) or provide yourself as a service but don't compete (Microsoft pre-Surface). If you compete and licence, you end up being Apple during the clone years, or Palm. Companies might take a free ride on a crocodile, but they'll get off when they can cause it's not very safe...

    Lenovo has done a decent job with Thinkpad, so it's not entirely doom for Moto either.

  10. Lenovo again? by LostInTaiwan · · Score: 3, Funny

    Lenovo again? First you took my Thinkpad now my Moto X.

    I guess the "Don't be Evil" Google is long dead. The principled stand of exiting from the Chinese market, followed by assembling the Moto X in the US, then selling Motorola to Lenovo? ? ? WTF, Google.

  11. Re:Ouch by AuMatar · · Score: 3, Insightful

    As I pointed out elsewhere, this isn't the only sale from that purchase. Look here

    http://www.forbes.com/sites/ti...

    They already sold off parts of that 13 bn for 2 bn in cash and 15% stake in another company. This makes another 2 bn. They also got to keep the patents, and got massive tax writeoffs for years. They may have come out ahead on cash (depending on the tax writeoffs) and definitely ended up buying those patents for a few billion max.

    --
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