Updated: Lenovo to buy Motorola from Google for $3 Billion!

lenovo-logo-1Well now that the dust has settled a bit, we can actually take a closer look at some of the details of this proposed deal. Though it was kind of funny how many corporate experts came flocking out of various corners of the internet following the freakish suddenness of this announcement.

The Motorola that Lenovo will acquire will be a very different animal than the one that Google purchased for $12.5 Billion. Firstly, there’s no set-top division. That was sold to Arris Group for $2.35 Billion.

We also know that the experimental division of Motorola responsible for the modular Project Ara will be staying with Google. As will most of the patents they acquired in buying Moto. Lenovo will receive all of the Motorola branding and trademarks. Not too shabby as they’ll instantly become the number three Android manufacturer.

Lenovo will also receive a patent licensing deal. The timing on this makes perfect sense when placed next to the deal Samsung and Google hammered out recently. Google is making a tremendous amount of patent material available to the top Android manufacturer, and the number one PC manufacturer (who also happens to be making a play for more of the mobile market). Lenovo and Samsung get more IP weapons, and Google gets a Samsung less focused on altering Android and a new home for Moto for them to keep stave off any perception of impropriety. Lenovo gets a great brand with a lot of history, and like IBM’s Thinkpads, Lenovo is proving itself very capable of reviving old brands. My histrionic speculation below doesn’t feel like it was TOO far off the mark…

So why aren’t I happier about this? Rationally I know this is probably the best possible move for all parties involved. I think I’m somewhat disappointed on Motorola’s behalf. It takes a long time to incorporate a company following a buy out. We were just starting to see the fruits of a newer, leaner, meaner Moto. The Moto X was a terrific handset, and Moto G was the best possible Android answer to the onslaught of low cost Windows Phones like the Lumia 520.

Now little Moto has to move to a new home. I’m very confident Lenovo will be a solid keeper for the beleaguered brand, but I’m bummed seeing anything which might interrupt the little bit of momentum that we’ve started to see.

And while this makes fantastic business sense for Google, both from a revenue standpoint and to maintain good relationships with other manufacturers, it makes me feel like this entire procedure really was a cynical grab for a patent portfolio. The very accusations I defended Google from back in 2012. I don’t like being wrong like that.

More details on the Motorola Blog and Lenovo’s Press Release. My original article below.

***Original Article Jan 29, 2014***

I’ve discussed in the past how Lenovo has made terrific in roads in PC sales over the last several years, eventually topping the market as the number one manufacturer for Windows gear. Their handset and tablet business is strong worldwide, but they haven’t been able to crack into the USA market with any smashing success.

This move is sudden and completely unexpected, and yet somehow makes perfect sense from Lenovo’s perspective. Buying their way into a struggling yet established USA market, and with a company which is very focused on worldwide growth with phones like the Moto G. Lenovo stands to get a significant leg up in a variety of mobile arenas.

What is curious though is Google’s role in this transaction. They’ve only properly owned Motorola since May of 2012, and they’ve only released two phones with the company under their umbrella, the Moto X and the Moto G. We’re witnessing a lot of change at Google in how their devices are managed, with more Google Play Editions of tablets and phones showing up, less pressure on their Nexus brand, and a renewed partnership with Samsung.

One has to wonder if part of the patent agreement between Google and Samsung was built on non-competition clauses. Samsung will stop tweaking Android as severely if Motorola isn’t the favorite son for future Android updates and features.

In any case, it’s too early to tell exactly what Lenovo will get out of the deal. If it’s a total transfer, then Google stands to take a $10 Billion bath on the deal, but it’s far more likely they’ll be keeping some Motorola IP and patents to make the deal more favorable.

On top of acquiring IBM’s server business, Lenovo will now have customer solutions for almost every niche of the technology market. It’s becoming clear that they’re looking to offer up an even greater variety of mobility products to world markets over the coming years.

(Via Reuters)

Share your thoughts?