It seems Motorola is being flipped over form one company to another. We saw in 2012 that Google bought Motorola for 12.5 billion USD. This made Google owner of Motorola and its patents. However recently the news popped up and Lenovo confirmed it that it would be buying Motorola for a 2.91 billion USD. This price is approximately 4 times less than what Google paid. However, the price difference is rectified by the fact that Google would be keeping a majority of Motorola’s Mobile patents.
Lenovo to buy Motorola Mobility from Google for $2.91 billion
Not only this, it seems that Lenovo is out on a buyout, as earlier this week Lenovo said they would be buying IBM’s low-end server business for $2.3 billion.
Commenting in this deal Larry Page, CEO, Google said that Google would be best served by focusing on smartphone software rather than devices.
Lenovo plans to compete against Apple and Samsung and not to forget the increasingly aggressive Chinese smartphone makers in the highly lucrative U.S. arena.
Lenovo has been putting up its best by making his deals and buyout a profitable. Back in 2005, when Lenovo bought IBM’s Personal Computer Division, they worked their way out to be termed as the World’s Largest PC market.
“Using Motorola, just as Lenovo used the IBM ThinkPad brand, to gain quick credibility and access to desirable markets and build critical mass makes a lot of sense,” – Forrester Research analyst Frank Gillett.
Though Motorola has not been making into a huge sale figure but recent launches in collaboration with Google were pretty impressive. Even though, Motorola’s brand popularity will give Lenovo a head start in the market and combined with their efforts they might be in the larding market. Though it will take time to find that.
As per the reports, Lenovo would be the owner of 2,000 “patent assets” after this Motorola Deal. So far For making Motorola under Lenovo, Lenovo will pay $660 million in cash, $750 million in Lenovo ordinary shares, and another $1.5 billion in the form of a three-year promissory note, Lenovo and Google said in a joint statement.
The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones,” Lenovo’s chief executive, Yang Yuanqing, said in a statement.
“It all points to Google thinking in the short run that they’re better off betting on Samsung and keeping them close. And of course now they’re enabling a second strong runner (Lenovo) in the Android ecosystem.” – Carolina Milanesi, Tech Device Analyst, Kantar WorldPanel ComTech.
The Google Motorola Acquisition was being termed as Google’s way to get Motorola’s Trove of patents. They claimed that the deal was not made because Google wanted to make a role in Handset business. However their anticipation of Google selling out Motorola hardware division just after claiming the ownership of Patents seemed to fail and came as a surprise to them as Google did launched some handsets and worked on its marketing. It seems that Google wanted to try out if they can make the brand Motorola into something more profitable or not. Though the hardware division was not sold immediately but Google did sell Motorola’s cable television set-top box business to Arris Group Inc for $2.35 billion at the end of 2012.
“The smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.” Blog Post – Google’s Page.
This deal and Lenovo will now be deciding the fate of Motorola Brand. Not needed to mention but Motorola was not seeing great days in terms of sale figures. Let’s see if Lenovo can grab a market position in the highly competitive smartphone market or not.