Google has announced the sale of Motorola Mobility to Lenovo for a total of $2.9 billion. $1.41 billion will be paid at the end of the agreement, $660 million in cash and $750 million in Lenovo shares. The remaining $1.5 billion will be paid over the next three years. Google bought Motorola Mobility in August 2011 for $12.5 billion.
At first glance, for Google the Motorola Mobility deal may seem like a huge bust, also considering the fact that during these two and half years revenues have reduced more and more. Actually, the agreement with Lenovo is more complex and it should also be kept in mind that in April 2013 Google sold Motorola Home division to Arris for $2.35 billion.
Another point to keep in mind is that Google will retain ownership of a part of Motorola Mobility, the Advanced Technology Group. Among the projects in this division there’s the Ara Project, which aims to create a modular smartphone that allows customers to assemble it with the components they want. Other projects include technology that can be worn or even swallowed.
The most important element of Motorola Mobility’s sale to Lenovo concerns its patents. The company has many thousands of patents, a considerable arsenal in a period when there’s a war between companies based on alleged violations of patents, especially by the so-called patent trolls. Google will keep the vast majority of Motorola Mobility’s patents and in the press release that is explicitly motivated with the intention to defend the Android ecosystem.
The acquisition of Motorola Mobility in 2011 was made to strengthen the position of Android, its sale has the same purpose, though obviously in different ways. According to Google, Lenovo is having a tremendous growth in the field of smartphones and will be able to develop Motorola products the best way.
For Lenovo this is the second great acquisition in just a few days after buying IBM’s x86 server division. The Chinese company had tried to buy Blackberry a few months ago but the Canadian government blocked the operation fearing security issues, not trusting a Chinese company. Motorola Mobility is a company in a much better situation than Blackberry so in the end things went well for Lenovo.
No Google can focus on innovation in the Android ecosystem. One wonders whether it would’ve been better to do it already in 2011 instead of investing so much money and resources in Motorola Mobility. Evidently the possession of thousands of patents justifies that deal.
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