4 Comments

Summary:

Google has confirmed an agreement to sell Motorola Mobility to Lenovo for $2.91 billion.

(L to R): Google CEO Larry Page, Lenovo CEO Yang Yuanqing shake hands on $2.91 billion Motorola deal.
photo: Google

Google on Wednesday confirmed that it has signed an agreement to sell its Motorola handset business to Lenovo for $2.91 billion in a mixture of cash and stock. Google will retain the majority of Motorola’s patents, but Lenovo will gain access to 2,000 patents as well as the Motorola brand and trademark portfolio.

Lenovo has agreed to pay Google $660 million in cash and $750 million in stock, with the remaining $1.5 billion to be paid out over the next three years.

“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere,” Google CEO Larry Page said in a statement.

Dennis Woodside, Motorola’s CEO and former Google executive, echoed this sentiment: “As part of Lenovo, Motorola Mobility will have a rapid path to achieving our goal of reaching the next 100 million people with the mobile Internet. With the recent launches of Moto X and Moto G, we have tremendous momentum right now and Lenovo’s hardware expertise and global reach will only help to accelerate this.”

Google bought Motorola for $12.5 billion back in 2012. Since then it has sold Motorola’s set-top box business for $2.35 billion. While Motorola has been losing hundreds of millions of dollars each quarter since the purchase, this deal makes it pretty clear that Google was in it primarily for the patents from the get-go.

Also worth noting is that sale will not include the Advanced Technology and Projects group, which is responsible for the Project Ara modular phone. Sources at The Verge say the group will be integrated into Google’s Android team. Google will retain the patents the group developed, though Lenovo will also have a license to them.

The deal has yet to be approved in the U.S. or China.

You’re subscribed! If you like, you can update your settings

  1. Thats horrible news

  2. Good buy for Lenovo and a relief for Google and it’s partners.
    Now Lenovo is a clear #3 in smartphones and they were already a clear #3 in computing devices.
    As for Google’s costs ,you need to factor in the cash and tax benefits.

    1. Forgot that Google also sold the manufacturing facilities to Flextronics.

  3. I’m not really sure what to make of this news. I suppose that if I maintain my original assumptions about the Motorola acquisition, then the temporal nature of Google’s securing a manufacturing position for Android (i.e., a hedge against OEMs shifting momentum towards WP or their own mobile OS) must be that it was more of a proof of concept combined with the patents. Everyone now knows, with some confidence, that Google can, within a two year window, acquire an OEM with ~on-hand cash and get a Google-designed product to market. From a consumer standpoint, as is, I’m somewhat less enthusiastic about suggesting something like the Moto X as ‘the android phone’ to get for average consumers.

Comments have been disabled for this post