Motorola Mobility Sold to Lenovo

Francie Barrett

http://uk.reuters.com/article/2014/01/29/uk-google-lenovo-idUKBREA0S1YR20140129

(Reuters) - China's Lenovo Group (0992.HK) is nearing a deal to buy Google Inc's (GOOG.O) Motorola handset division for close to $3 billion (1 billion pounds), people familiar with the matter told Reuters on Wednesday, buying its way into a heavily competitive U.S. handset market dominated by Apple Inc (AAPL.O).

Lenovo is in the final stages of talks to buy the Google division that makes the Moto X and Moto G smartphones, as well as certain patents, the sources said.

A sale of Motorola would mark the end of Google's short-lived foray into making mobile devices and a pullback from its largest-ever acquisition. Google bought the U.S. cellphone giant in 2012 for $12.5 billion but has struggled to revamp the money-losing business.

Smart move from Google - think it was safe to say that getting into hardware was a disaster and it was best for them to cut their losses. They can still lean on third parties to make Nexus devices (which were better than anything Motorola ever produced). Still, they took a bath on this investment.

coldfire1x

http://gizmodo.com/google-is-selling-motorola-to-lenovo-1511898199

Inquitus

Francie Barrett wrote: »

http://uk.reuters.com/article/2014/01/29/uk-google-lenovo-idUKBREA0S1YR20140129

Smart move from Google - think it was safe to say that getting into hardware was a disaster and it was best for them to cut their losses. They can still lean on third parties to make Nexus devices (which were better than anything Motorola ever produced). Still, they took a bath on this investment.

The Moto G is probably the best 150 Euro phone we will ever see. It's simply sensational at that price and no other handset on any platform can hold a candle to it even at getting on for twice the price.

pedatron

The Moto X and Moto G were the only phones I can recall Motorola releasing while owned by Google and they were both good? Bought a Moto G for my father and have to say its a truly amazing phone for the money and thought it had been doing well? Obviously not well enough so.

Why didn't google just make Nexus Motorolas and cut out the middle man? Maybe I'm missing something really obvious here.

Sheldons Brain

Lenovo have the manufacturing know how to make the phones at a profit. Google have retained certain copyrights and patents that they were interested in. Perhaps Lenovo will make some future Nexus models.

heebusjeebus

Google are keeping the skunkworks team so they will still have a hand in hardware innovation (tying in with wearables no doubt).

Simi

pedatron wrote: »

The Moto X and Moto G were the only phones I can recall Motorola releasing while owned by Google and they were both good? Bought a Moto G for my father and have to say its a truly amazing phone for the money and thought it had been doing well? Obviously not well enough so.

Why didn't google just make Nexus Motorolas and cut out the middle man? Maybe I'm missing something really obvious here.

Because Google and Samsung have a complicated codependent relationship. It doesn't make sense for Google to antagonise Samsung, by undermining it's market position with cheap high quality hardware. I think the purchase of Motorola was only ever intended as an insurance policy in case Samsung decided to drop android & cut Google out. But seeing as they've basically agreed to be partners for the next decade, that's no longer an issue.

ThisRegard

Francie Barrett wrote: »

http://uk.reuters.com/article/2014/01/29/uk-google-lenovo-idUKBREA0S1YR20140129

Smart move from Google - think it was safe to say that getting into hardware was a disaster and it was best for them to cut their losses. They can still lean on third parties to make Nexus devices (which were better than anything Motorola ever produced). Still, they took a bath on this investment.

I posted this in the Bargain Alerts thread, but Googles aim was never to get into the hardware market.

At the time it was thought that Google were buying Motorola to get hold of the patents, apparently with the sale to Lenovo Google are retaining the patents and then licensing them out. Google has been losing money on Motorola since they bought it, they were using it to push cheap hardware into new territories in order to get people into their ecosystem which was their main aim.

They're also now set up Motorola/Lenovo as a direct competitor to Samsung, they didn't sell it off in order to placate them.

Quin_Dub

Very good move by them...

They keep all the patents , which was why they bought it in the 1st place and they offload the hardware piece - Giving themselves a major Android manufacturer in China to work against Apple in that Market and Lenovo feel like they've gotten a bargain pathway into the US market for handsets..

Gran Hermano

Smart move for all. Google keep the patents and Lenovo who are already a big player in Asian mobile market get the Motorola brand/legacy for tablets/phone to add to the Thinkpad range. Thinkpad sales do well globally but with enterprise consumes moving more towards mobile devices this acquisition of Motorola will help. China was worried about the dominance of Samsung in their market. Having Lenovo/Motorola as an android alternative is good for Google.

god's toy

Simi wrote: »

Because Google and Samsung have a complicated codependent relationship. It doesn't make sense for Google to antagonise Samsung, by undermining it's market position with cheap high quality hardware. I think the purchase of Motorola was only ever intended as an insurance policy in case Samsung decided to drop android & cut Google out. But seeing as they've basically agreed to be partners for the next decade, that's no longer an issue.

Yep that's what I was thinking to, Sammy plays nice with google and google doesn't give sammy a reason to leave, everyone wins, kinda.
Also seeing that sammy are cutting back on the bloat on the new OS, wonder if that's related to...

I just hope this is not the end of the Nexus program, that they don't just last out Google Play like versions of Sammy phones at full price...

Francie Barrett

god's toy wrote: »

Yep that's what I was thinking to, Sammy plays nice with google and google doesn't give sammy a reason to leave, everyone wins, kinda.
Also seeing that sammy are cutting back on the bloat on the new OS, wonder if that's related to...

If Google are going to stay out of hardware, then I would be shocked if Samsung didn't rein in most of their UI customizations.

Alpha Dog 1

Those patents must be invaluable considering they just blew 10 billion.

If there not then it's a major fcuk up!

wotzgoingon

Alpha Dog 1 wrote: »

Those patents must be invaluable considering they just blew 10 billion.

If there not then it's a major fcuk up!

Google is loaded anyway. Small change for them.

nataspy

wotzgoingon wrote: »

Google is loaded anyway. Small change for them.

Not really. They've 'only' 59 billion.

Monumental fcuk up.

Hope Lenovo do something good. Maybe start with losing the Motorola name. Too many negative connotations over the years.

Quin_Dub

nataspy wrote: »

Monumental fcuk up.

Don't agree - The key reason for buying Motorola was the patents , the hardware business was an after-thought , everyone said it at the time.

They needed those patents to stop Apple coming at them (via Samsung).

Spending $12B was a bargain in that context - The potential costs of litigation could have been multiples of that...

They've kept anything of actual value - The Patents and the skunk-works development arm, ATAP (The people that actually develop the good stuff) and sold the Phone sales company for almost $3B ,when it was basically worthless.

Some pretty good business if you ask me..

Strategic move for google as they don't want Samsung to be the one dominant player in android handsets. Lenovo will get into handsets in a big way. HTC are finished as they haven't made enough sales, even though they have some good products. They will probably be sold in the next year or so. Samsung spend billions on marketing and HTC don't have that scale. Sony are pretty small. Samsung made over 90% of the profit (as opposed to sales) made on android handsets last year.

As poster above said, Google bought motorola for the patents, not the handset business. They use these patents to avoid being sued over the android os. They still have this benefit so they didn't blow $10bn.

Gran Hermano

Also a good move for Lenovo, compliments the recent server business acquisition and existing business. Wonder will they continue to use the Motorola brand like they did with Thinkpad (would make sense for Western markets).

nataspy

Quin_Dub wrote: »

Don't agree - The key reason for buying Motorola was the patents , the hardware business was an after-thought , everyone said it at the time.

They needed those patents to stop Apple coming at them (via Samsung).

Spending $12B was a bargain in that context - The potential costs of litigation could have been multiples of that...

They've kept anything of actual value - The Patents and the skunk-works development arm, ATAP (The people that actually develop the good stuff) and sold the Phone sales company for almost $3B ,when it was basically worthless.

Some pretty good business if you ask me..

I get that, but spunking 10 billion away (a 6th of your cash) isn't very good business.

They could've done more with the brand and made less of a loss a little further down the road. Though I expect they expect to recoup some of that on the patents.

Edit:

My mistake.

On further investigation:

Google technically loses $3.2 billion,but still comes out with patents worth more than the mathematical loss.

http://www.fool.com/investing/general/2014/01/30/is-selling-motorola-the-right-move-for-google.aspx

irishpancake

nataspy wrote: »

I get that, but spunking 10 billion away (a 6th of your cash) isn't very good business.

They could've done more with the brand and made less of a loss a little further down the road. Though I expect they expect to recoup some of that on the patents.

Edit:

My mistake.

On further investigation:



http://www.fool.com/investing/general/2014/01/30/is-selling-motorola-the-right-move-for-google.aspx

Shure, any phool cudda told you that!!