Google has confirmed that their mobile handset business, mainly Motorola, which it bought about two and half years ago will be acquired by Lenovo. This basically means Google will be exiting the mobile phone manufacturing industry. Lenovo which bought its laptop and PC business from IBM, also will find it beneficial to now own the Motorola brand.
This comes in the same week Google might be settling it’s issues with Samsung and also only a couple of weeks after it acquired Nest, a home automation company. The Motorola business might be sold for over US $3 billion.
Win-Win for Google and Lenovo
Google had to get rid of Motorola. It was not making money over the last couple of years and worse not having a hit phone to its credit was a problem. Google is into software and the web. It simply might have been too much to focus on, having to run a hardware based Motorola company.
Google also might be retaining the patents from Motorola which will serve it protection from lawsuits to its Android OS, from the likes of Apple and Microsoft.
Lenovo has a successful PC business but in the so called post-PC era, tablets and phones are the future. Here Lenovo has very little dominance. So having Motorola’s business is not a bad idea. Lenovo will have some very well engineered phones in the Moto X and Moto G variants. It will find itself a foothold in the US markets.
Does Motorola get anything?
It is hard to say if Motorola might winning anything in this trade -off between Google and Lenovo. Motorola has undergone restructuring. Motorola’s new owners will probably be more committed to becoming a large phone maker than Google has been. Lenovo also has a good track record of doing a good job with its new acquisitions. An example of that is IBM’s PC and notebook businesses.
So chances are all three parties in this regard might end up winning.
This write-off/sale by Google also signals, that it will be concentrating on betting on getting success with products like Nest and Google Glass.
What do you think about Lenovo adopting Google owned Motorola? Do drop in your comments.
Link: Google Blog