Google sells Motorola Mobility to Lenovo for $2.91 billion

Google has just announced that it will be offloading the loss-making Motorola Mobility smartphone business to Chinese OEM Lenovo in a deal valued at about $2.91 billion.

In a post on his company's official blog, Google CEO Larry Page officially announced that Lenovo would be acquiring Motorola Mobility to push Android further with its global reach and manufacturing prowess. Larry said, “Lenovo has the expertise and track record to scale Motorola into a major player within the Android ecosystem. They have a lot of experience in hardware and they have global reach. In addition, Lenovo intends to keep Motorola’s distinct brand identity--just as they did when they acquired ThinkPad from IBM in 2005.” 

Google purchased Motorola Mobility, the handset division of Motorola, for $12.5 billion in May 2012, but is now offloading it to Lenovo for a fraction of the price. According to the Google investor relations site, the transaction will be carried out in cash and stock. Lenovo will get control of the Motorola Mobility brand and 2000 patents, however, Google would maintain ownership of the remaining patent portfolio and will license them to Lenovo.

Motorola Mobility has consistently lost money for Google, reporting a total operating loss of $248 million in the the third quarter of 2013. Google initially purchased the company to make use of its valuable communications patents against competitors but after losing majority of lawsuits involving Android, Google seems to have given up on keeping the failed handset division.

Image via Motorola

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**** Google, **** Google, **** Google!!! Buying Motorola and doing a half assed job with Motorola and selling it off 19 months later to Lenovo is crazy. At least Lenovo isn't brain dead like Google is.

A conspiracy between Google and Samsung. Goob job. It's just a matter of time before OEMs realize that there is only Google and Samsung on the smartphone business.

Google's purchase of Motorola for $12 billion was the dumbest management decision in the history of dumb management decisions. They were outplayed, outmaneuvered and outfoxed by Carl Icahn at every step. This new transaction proves that. Embarrassing. Worse, they still haven't won a single court case using Motorola's "valuable" patent portfolio. They've lost dozens of cases in courts around the world.

With such a MASSIVE loss of shareholders' money, surely Google's CEO and/or Chairman MUST resign?

Major_Plonquer said,
With such a MASSIVE loss of shareholders' money, surely Google's CEO and/or Chairman MUST resign?

No, they will just by more robotics companies and float more balloons until SkyNet becomes sentient.

Bummer. Hopefully they will keep making the Moto X and Moto G and I am betting there will be close ties with Google If Lenovo can push Android further and continue to produce good phones with Moto, then all the power to them.

they may still make them but you wont be buying them for the same price they are at right now, Lenovo are not in this business to loose money.

techbeck said,
Yea, mediocre phones which got some pretty good reviews.

Uh, the zune got very good reviews, yet it ended up being a sales failure.

Apple sold 150million Macs over a 30year period, that's 5million a year. The Zune was a bigger success then that. Still non of the tech journalists and ifans mention Apples huge blunder with Macs.

Rumors are already swirling about Google killing the Nexus line. I wonder if this is more fuel for the fire. After all, Google is getting all snuggie with Samsung now. Perhaps Google wants out of the Nexus business so they can strengthen the relationship with their strongest partner.

you have it correct, google has chosen Samsung as there oem of choice with android. Samsung have even been told to get rid of all the crapware and get back to a more basic android os.

If Samsung does indeed get rid of all its crappyware, and focus on the stock image.
And if they price it right (like Nexus right), maybe there is a chance. Otherwise, I may switch back to iPhone.
This is all assuming the death of Nexus line, by the way. As long as Nexus is around, come to papa!

Figure 8 Dash said,
Rumors are already swirling about Google killing the Nexus line. I wonder if this is more fuel for the fire. After all, Google is getting all snuggie with Samsung now. Perhaps Google wants out of the Nexus business so they can strengthen the relationship with their strongest partner.

Wait a minute. Next month in Barcelona, Samsung are going to announce their new line of Android-free phones. They've already had to pay Apple a $bill and the next Apple case starts in March. I'm hearing $4- $6 bill this time. Not the basis for a good long-term business. Face facts. Android is dead.

Personally, I think Google failed at managing Motorola. It is not so much of owning Motorola. It is more like being a major shareholder of Motorola and do nothing to help Motorola be more competitive at all.
Clearly from the very start, Motorola isn't getting any preferential treatment from Google's ownership when it comes to Android integration. Nexus is still the first class, so there is just no point for Google to own Motorola at all.
I am actually for Lenovo to buy. Maybe we will get a great ThinkPad phone after all.

ThunderRiver said,
Personally, I think Google failed at managing Motorola. It is not so much of owning Motorola. It is more like being a major shareholder of Motorola and do nothing to help Motorola be more competitive at all.
Clearly from the very start, Motorola isn't getting any preferential treatment from Google's ownership when it comes to Android integration. Nexus is still the first class, so there is just no point for Google to own Motorola at all.
I am actually for Lenovo to buy. Maybe we will get a great ThinkPad phone after all.

Truth is, Google has no management talent. They couldn't manage a fart at a Boston Baked Bean Picnic. And boy, does it show. The ultimate embarrassment will be when they're shown up by the Chinese.

I'm a bit of a Lenovo fanboy (self described) as I am also an Apple fanboy (self described, and properly accused). So, I may be really torn over my next phone purchase.

Microsoft wins.

Motorola is finally going to pay android patent licensing fees to MS, and google loses 9 Billion dollars buying useless patents. Justice is served.

Edited by vcfan, Jan 29 2014, 10:21pm :

vcfan said,
Microsoft wins.

Motorola is finally going to pay android patent licensing fees to MS, and google loses 9 Billion dollars buying useless patents. Justice is served.

I disagree. MS will win when Oracle does (and that appears to be what will happen right now).

Actually Lenovo bought "Motorola Mobility" not "Motorola".... Kind MS buying “devices and services” division of Nokia, not Nokia itself.

Fritzly said,
Actually Lenovo bought "Motorola Mobility" not "Motorola".... Kind MS buying “devices and services” division of Nokia, not Nokia itself.

There is no "Motorola. Hasn't been for nearly 5 years. The company split in two a long time ago.

BTW: Does Motorola do ringtones yet?

If Lenovo pulls this merger off, they could actually bring back a famous Motorola cellphone brand - StarTAC. (For the younger among the Neowinians, Motorola's StarTAC was the original "candybar" cellphone, and inspired a ton of "knockoffs" all over the planet - including the Nokia "Shorty" and Samsung G102 and later G105.)

PGHammer said,
If Lenovo pulls this merger off, they could actually bring back a famous Motorola cellphone brand - StarTAC. (For the younger among the Neowinians, Motorola's StarTAC was the original "candybar" cellphone, and inspired a ton of "knockoffs" all over the planet - including the Nokia "Shorty" and Samsung G102 and later G105.)

Oh I know StarTAC... I am old enough to remember how my parents were mad at me for talking late at night with me girlfriend on a friend's StarTAC.

-Razorfold said,

I think you mean clamshell

Correct; furthermore the original Motorola big hit was the,Microtac: not a clamshell as intended nowadays but still a flip open phone. I had in 1990 and it seemed so "Jetsons" compared to other candybar phones of the time like the NEC.

PGHammer said,
If Lenovo pulls this merger off, they could actually bring back a famous Motorola cellphone brand - StarTAC. (For the younger among the Neowinians, Motorola's StarTAC was the original "candybar" cellphone, and inspired a ton of "knockoffs" all over the planet - including the Nokia "Shorty" and Samsung G102 and later G105.)

The StarTAC was a flip-phone, not a candy bar. Nice one too. I had a couple.

This is very bad news for Microsoft. Lenovo is going all in with Chromebooks on the PC side and now with Motorola....they will have a complete hardware ecosystem to match Samsung and Sony. Lenovo is only going to go "minor" in Windows Phone as it's always easier for hardware manufacturers to go Android.

History and logical reasoning tell us that computer hardware makes very little money. It's all in the software. Google can now focus on just that.

Doubtful. It was supposed to be "dire news" for MS/WP when Google purchased Motorola, and we see how that turned out. Lenovo already has a phone business going decently in china.

VictorWho said,
History and logical reasoning tell us that computer hardware makes very little money.

That depends. If you're talking about competing with the cheapest possible hardware, there's little margin. However, if you look at this company called Apple, I think they do pretty well with their hardware sales.

Easier to go with android? How did that happen?

Anyway this has proven a disaster for google - who are making so much money from their 1 true business that they are just scatter-gun buying anything that might become a business.

Motorola was just a patent moat and yet it was all junk - the only useful ones were covered by FRAND which they tried to back out of and lost. They just passed the buck to Lenovo who will have to stump up for the patents that they are otherwise infringing with android.

VictorWho said,
This is very bad news for Microsoft. Lenovo is going all in with Chromebooks on the PC side and now with Motorola....they will have a complete hardware ecosystem to match Samsung and Sony. Lenovo is only going to go "minor" in Windows Phone as it's always easier for hardware manufacturers to go Android.

History and logical reasoning tell us that computer hardware makes very little money. It's all in the software. Google can now focus on just that.

Going all in with Chromebook LOL.. maybe the crappy consumer grade Lenovo yes.. but for business professional grade Thinkpads.. No freaking way.

VictorWho said,
This is very bad news for Microsoft. Lenovo is going all in with Chromebooks on the PC side and now with Motorola....they will have a complete hardware ecosystem to match Samsung and Sony. Lenovo is only going to go "minor" in Windows Phone as it's always easier for hardware manufacturers to go Android.

History and logical reasoning tell us that computer hardware makes very little money. It's all in the software. Google can now focus on just that.

Greetings from Beijing. Here in China people reading your comment would say that you are "like the peony flower sailing to the sea on the Mudanjiang river". Chinese people would say this because there's no word in Mandarin for "d1ckhead"

Google do software? You're having a laugh. Chrome? OK. I'm having a laugh.

TogoP said,
Easier to go with android? How did that happen?

Anyway this has proven a disaster for google - who are making so much money from their 1 true business that they are just scatter-gun buying anything that might become a business.

Motorola was just a patent moat and yet it was all junk - the only useful ones were covered by FRAND which they tried to back out of and lost. They just passed the buck to Lenovo who will have to stump up for the patents that they are otherwise infringing with android.

FYI: Lenovo already have a patent fee payment agreement with Microsoft. More money for Redmond.

Major_Plonquer said,

Greetings from Beijing. Here in China people reading your comment would say that you are "like the peony flower sailing to the sea on the Mudanjiang river". Chinese people would say this because there's no word in Mandarin for "d1ckhead"

Google do software? You're having a laugh. Chrome? OK. I'm having a laugh.

I don't get why Chinese people would be offended (I know I am not offended). And I am fairly certain tons of Chinese people know how to say "d!ckhead," given how prevalent English learning is in China. so no thanks.

With ThinkPad and Motorola under Lenovo's wings, Lenovo has a lot of potential to create some great products, assuming they price it right of course.

/s on

Maybe Motorola should have went with WP instead of Android where they couldn't stand out.

/s off


I hope this deal happens.

It will stop the patent slap fight with Microsoft that Google pushed Motorola to start even before they acquired them.

They could rejoin the cellular OEM fold and participate in patent sharing that Google has prevented them from doing.

They also have some good hardware technology that has dwindled (not been promoted) since the Google acquisition, especially their headsets/accessories. (Yes, I like Motorola headsets, even when using a Nokia WP.)

I am sure Lenovo can leverage a much better deal than other OEMs; being the 1st or 2nd OEM in the World gives it a lot of contractual power.

Lenovo makes great devices as does Motorola... so this will be great. Google's loss.

Maybe we'll see some Motorola WP9 phones now since Lenovo is also working on one ;-)

dingl_ said,
No, Lenovo makes android phones as part of this deal

I find it hard to believe that, following this deal, Google will have any legal right to dictate how Motorolla / Lenovo do business or what products they release...

M_Lyons10 said,

I find it hard to believe that, following this deal, Google will have any legal right to dictate how Motorolla / Lenovo do business or what products they release...

This. dingl is stating thinks as fact that he has absolutely no clue about.

M_Lyons10 said,

I find it hard to believe that, following this deal, Google will have any legal right to dictate how Motorolla / Lenovo do business or what products they release...

It's possible, but that would likely be viewed as anticompetitive behavior.

dingl_ said,
No, Lenovo makes android phones as part of this deal

There's nothing in the agreement that says anything remotely like this. Wishful thinking.

FloatingFatMan said,
So, I wonder who's butt is in a sling over this disaster? A $9.4 billion loss is not something that goes unpunished...

This would have never happened if Motorola went with Android!

FloatingFatMan said,
So, I wonder who's butt is in a sling over this disaster? A $9.4 billion loss is not something that goes unpunished...
Not quite 9.4. They did sell the set top box business to Arris for like $2-$3B. Still a horrendous amount of money to lose though.

FloatingFatMan said,
So, I wonder who's butt is in a sling over this disaster? A $9.4 billion loss is not something that goes unpunished...

Good question: Funny how Apple has a 'horrible quarter' and punished by the markets but Google wastes 10billion on an investment that doesn't yield any results (in fact it sucks money out of the parent company) and not an eye lid is battered.

Mr Nom Nom's said,

Good question: Funny how Apple has a 'horrible quarter' and punished by the markets but Google wastes 10billion on an investment that doesn't yield any results (in fact it sucks money out of the parent company) and not an eye lid is battered.

A one-time mistake that doesn't harm Google's fundamentals. It's bad, but doesn't really affect the future of the company.

Or, in Apple's case, 1% yoy drop in sales in their largest market. If it wasn't for expanding sales in China, the numbers would be even more disastrous. Apple has peaked and sales are contracting, and it terrified investors.

I would have expected a more negative reaction about the Google news on Wall Street, though.

Reports are now showing that google will sell Boston Dynamics for $3.50 and half a
ham & cheese sandwich after purchasing the robotics company back in December for $10.8 million.

I didn't see this one coming, kind of a shame that nothing really panned out of this deal, no amazing phones, no epic court room wins ...like nothing. Google dropped the ball on this one.

Brandon Live said,
Uhh, they weren't fending off patent trolls. They were fending off competitors with patents they were infringing. Not the same thing.

Here here, the patent system is not always used for negative business, google are a massive company and refused to enter an agreement on patented tech used in Android, but because they didn't make money direct they had a loophole (no direct licensing money) - so the burden of this unlicensed tech fell onto the OEMS making and selling the devices. This isn't trolling, its protecting the stuff you have patented. And google F**ked its partners by making them face this (by not licensing tech in their product).


but is now offloading it to Lenovo for less than half the price.

Being accurate sounds SO much better...


but is now offloading it to Lenovo for less than quarter the price

So buying them for their patents didn't work out, and buying them for their smartphones didn't work out, what a surprise. Wonder what's going to happen to their factory in Ft. Worth.
I guess this means MSFT has won the patent wars.

Not quite. Android updates I think have disabled FAT32 and are using a different file system with virtual fat32 capability - if my coworker is to be believed. Google didn't win, but Microsoft isn't winning either.

And the consumer loses.

greenwizard88 said,
Not quite. Android updates I think have disabled FAT32 and are using a different file system with virtual fat32 capability - if my coworker is to be believed. Google didn't win, but Microsoft isn't winning either.

And the consumer loses.

The patent in regards to fat32 was long file name support IIRC which has been worked around. IIRC it relates to how the file name is stored for backwards compatibility but in the end it is a non-issue when compared to the other patents that exist.

that would be truly unfortunate. I know that google originally only bought the company for their patants., but i honestly hoped something more would come out of their ownership of Motorola perhaps making better android devices. I kinda hope that this is false news.

Geoffrey B. said,
that would be truly unfortunate. I know that google originally only bought the company for their patants., but i honestly hoped something more would come out of their ownership of Motorola perhaps making better android devices. I kinda hope that this is false news.

It's why I left Google's side and returned to MS. Despite the mistakes of the past they have a vision for the future. Google's actions lack cohesion and their line-up is very fragmented because of it. This goes for both under and above the hood. This news doesnt come as a suprise to me, although I too would have been very disappointed with such news a year ago. I used to be a big Motorola fan, I used to only buy phones by them. Working directly for the Android maker himself could have let to some aweomse devices.

Microsoft has a vision of the future? I don't think so. Who is doing Google Glass? Who is buying an Artificial Intelligence Company?

VictorWho said,
Microsoft has a vision of the future? I don't think so. Who is doing Google Glass? Who is buying an Artificial Intelligence Company?

The question should be why, not who. Google has a vision of the future. If you don't like that vision, thankfully there are alternatives.

VictorWho said,
Microsoft has a vision of the future? I don't think so. Who is doing Google Glass? Who is buying an Artificial Intelligence Company?

No, you just don't like Microsoft's "Metro everywhere" vision, but it definitely exists. Meanwhile Google (arguably a machine learning company) is buying an AI company.. Wouldn't that a bit like Microsoft buying an OS?

VictorWho said,
Microsoft has a vision of the future? I don't think so. Who is doing Google Glass? Who is buying an Artificial Intelligence Company?

Microsoft spends 3.5x as much as Google on research and development. Instead of buying up small AI companies, they are developing it themselves.

VictorWho said,
Microsoft has a vision of the future? I don't think so. Who is doing Google Glass? Who is buying an Artificial Intelligence Company?

Who is actually developing things like that internally? Look at Microsoft's R&D. Google can't touch it...

M_Lyons10 said,

Who is actually developing things like that internally? Look at Microsoft's R&D. Google can't touch it...

And even better, not only can't google touch it, they're buying their scraps, like the medical lens that was reported earlier. It was paid for and developed at MS research labs. And no "reporter" has so far decided to investigate how the researcher and his technology developed at MS with their funds ended up at google...

Was it something sneaky back door stuff, or did MS let him and his patents and technology go because it was found to be useless and not worth anything?

It's a sad reality indeed. MS is known as the 'bad guy' and they don't really get the appreciation by media. While Google is known as the 'good guy' and all the things they do always get over appreciated and hyped.

For instance, recently Google bought NEST and the media hyped it like nobody business. It's nothing but a thermostat, which Honeywell and the likes provided already. In fact, MS has been building an advanced 'intelligence city' concept for so many years now, but it never got any attention from the media. This is far more advanced than a thermostat.

http://www.microsoft.com/en-us...f-the-future-chapter-1.aspx

Having said that, I came to the conclusion that MS is bad at advertising/marketing, but they know technology very well. While Google is good at advertising, but not so much in technology (from breadth and depth perspective, not just search engine).

VictorWho said,
Microsoft has a vision of the future? I don't think so. Who is doing Google Glass? Who is buying an Artificial Intelligence Company?

You 'don't think so'? Care to eleborate as to why you don't think so? Microsoft is working towards their 'one OS' vision. One OS to power all devices in your life. They re changing Windows drastically both under the hood as well as the face of Windows to realize this vision.

In turn Google is just buying stuff. They bought Android as well. Now Android profits go to Google (and MS).. big deal. Google makes a nice profit and that allows them to buy even more stuff. But there is no consistency behind what they buy. At one point I had high hopes for them but look at where they are at. They have Chrome and Android, too compleetly isolated systems. They buy and sell Motorola but keep producing Nexus devices at third parties.

Besides explaining why you think MS lacks vision could you also explain why you think Google has one?

M_Lyons10 said,

Agreed. And it's all Google was after too...

Exactly, which is why I'm surprised they held on to it as long as they did, but I guess they couldn't find anyone interested in buying it off them till now.

I called this since the start though, just a patent grab since Google has, and still does IMO, have a weak patent portfolio.

Xenon said,
Wonder who gets the patents. That's where the money is.

Google is keeping most of Motorola's huge patent portfolio, the original reason the Internet search giant agreed to spend $12.5 billion buying the company in 2011

http://www.usatoday.com/story/...ng-motorola-lenovo/5035673/

So, at a $10 billion loss, I hope they think the patents were worth that. :-S

Meanwhile, Lenovo gets a division that doesn't hold most of the patents for ideas they originally thought up. This is such a weird world. Must be so exciting to work for Motorola now... Ugh...

Xenon said,
Wonder who gets the patents. That's where the money is.
Not so much in Motorola's case. The patents they brought to the table to help Android in patent battles were little, if any help at all.

Northgrove said,

http://www.usatoday.com/story/...ng-motorola-lenovo/5035673/

So, at a $10 billion loss, I hope they think the patents were worth that. :-S

Meanwhile, Lenovo gets a division that doesn't hold most of the patents for ideas they originally thought up. This is such a weird world. Must be so exciting to work for Motorola now... Ugh...

Lenovo is buying it's way into the US smartphone market with this, same thing they did in the PC market when they bought IBM's PC business. I bet the Motorola brand is gone in 3 or 5 years.

Not exactly: Google had already sold Motorola top box division for around 2.5/2.9 billions, now they have only sold Motorola Mobility division, like MS bought a division of Nokia not the whole company.

Hopefully Lenovo/Motorola will be open to making Windows Phones. Both have previously expressed interest in Windows Phone (Motorola prior to the Google buyout) and Lenovo earlier last year.

Motorola can't import Android phones in the US because they refuse to resume licensing patents from Microsoft. Seems like a deal could be worked out there with Google finally out of the picture. Lenovo has also been a really strong partner for Windows 8 (Yoga, Thinkpad 8, and X1 Carbon being standout Windows devices).

TrekRich said,
Thats a shame, the Moto G and Moto X are good phones.

Lenovo is now the #4 smartphone manufacturer by unit sales. They're already doing pretty well.

Obviously Lenovo thinks this is a good idea... or else why would they offer to buy them?

I'm guessing a hardware manufacturer like Lenovo will be able to utilize Motorola better than Google could.

Lenovo will not make WindowsPhone, that's not part of the deal. ha if you think Google sold off Motorola this cheaply without an all android stipulation you're kidding yourself

that said I think an OEM obligated to android is stupid, does nothing for innovation or competition

dingl_ said,
Lenovo will not make WindowsPhone, that's not part of the deal. ha if you think Google sold off Motorola this cheaply without an all android stipulation you're kidding yourself

that said I think an OEM obligated to android is stupid, does nothing for innovation or competition

Oh come on, you have no clue what was or was not stipulated in the deal. Also what makes you think Google will have any say whatsoever in how Lenovo run the newly acquired Motorola division? Who's deluding themselves here?

TrekRich said,
Thats a shame, the Moto G and Moto X are good phones.

Hopefully they will keep on making them and coming out with updated models. These got some pretty good reviews so I am betting Lenovo will build on that. As long as they don't add some crappy UI.

Avatar Roku said,
Hopefully Lenovo/Motorola will be open to making Windows Phones.

Ha! I was recently doing an internship at Motorola and they kept making fun of my Lumia 920 (although, they were a little interested in the 1020's camera), so I would love to see their faces if they had to start working with Windows Phone.