What a week! Google sells Motorola Mobility to Lenovo for $2.91bn

First Samsung and Google announce a pact, and now Motorola has been sold off to Chinese manufacturer Lenovo. What a week!

Although it was rumoured on Monday that there were changes afoot at Motorola, I doubt anyone could have expected this announcement – namely that Lenovo is to acquire Motorola Mobility for US$2.91bn.

That’s far less than the US$12.5bn Google originally paid for the company in 2012, which means it isn’t just the Moto G that represents excellent value for money. Now it seems the entire company comes at a knock down price too.

This is Google’s official blog statement:

“We’ve just signed an agreement to sell Motorola to Lenovo for $2.91 billion. As this is an important move for Android users everywhere, I wanted to explain why in detail.

We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users. Over the past 19 months, Dennis Woodside and the Motorola team have done a tremendous job reinventing the company. They’ve focused on building a smaller number of great (and great value) smartphones that consumers love. Both the Moto G and the Moto X are doing really well, and I’m very excited about the smartphone lineup for 2014. And on the intellectual property side, Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners.

But the 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. As a side note, this does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry. We’re excited by the opportunities to build amazing new products for users within these emerging ecosystems.

Lenovo has the expertise and track record to scale Motorola into a major player within the Android ecosystem. They have a lot of experience in hardware, and they have global reach. In addition, Lenovo intends to keep Motorola’s distinct brand identity—just as they did when they acquired ThinkPad from IBM in 2005. Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem.

The deal has yet to be approved in the U.S. or China, and this usually takes time. So until then, it’s business as usual. I’m phenomenally impressed with everything the Motorola team has achieved and confident that with Lenovo as a partner, Motorola will build more and more great products for people everywhere.” – Larry Page, CEO

It’s far too early to say what Lenovo will do with the company, and according to The Verge, Google has not sold off the division working on Project Ara (the modular phone project), which could mean we might actually see something in this exciting arena in the future.

Project Ara isn't part of the deal
Project Ara isn’t part of the deal

All that’s clear for now is that there are some big changes being made in the whole Android world, and there might be more news to come.

It’s also very clear that Google is definitely more interested in new projects that don’t consist of ordinary smartphones or tablets, which are probably seen as dumb terminals little more exciting than buying a new PC.

Google Glass, robotics, and other ‘Internet of Things’ projects seem the way to go, while also developing and enhancing the many existing Google products and services.

It’s certainly hard to guess what Google is going to do though, as it wasn’t that long ago that it seemed as if Google would be working towards making its own devices to the dismay of other Android manufacturers.

Now it seems that’s a rather unlikely move, although that doesn’t mean the likes of LG, Sony, HTC, Huawei, ZTE, and many more, should be breaking out the champagne just yet.


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