Not even three years after Google bought wireless device biggie Motorola for $12.5 billion comes news that it’s made a deal with Lenovo to take the manufacturer off Google’s hands for a fraction of that amount.
Reuters originally reported that Beijing-based Lenovo is looking to pay $3 billion for the handset maker recently responsible for Google’s Moto X and Moto G smartphones.
Almost immediately thereafter, Lenovo confirmed the news via press release, saying the current purchase price is US$2.91 billion.
The deal means that Lenovo, which bought its way into the US computer market in 2005 by acquiring IBM’s PC business, will now control the Motorola brand, which includes recent product launches like the Moto X and Moto G smartphones.
Why is Google accepting so much less than it paid for Motorola?
According to Lenovo, Google will maintain ownership of the “vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures.”
“The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” said Yang Yuanqing, chairman and CEO of Lenovo in a statement. “We are confident that we can bring together the best of both companies to deliver products customers will love and a strong, growing business.”
Adds Google’s Larry Page, “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’s purchase of Motorola, begun in 2011 and closed in spring of 2012, was an ill-fated attempt for the Internet giant to buy its way into the handset business in the hopes of going head-to-head with Apple.
Alas, while Google’s Android OS for smartphones and tablets continues to be very popular, the devices that were born out of the Motorola acquisition failed to catch fire with consumers.
Lenovo may have more luck with Motorola’s handset business, especially in China where the long-awaited release of Apple’s iPhone devices did not result in sales similar to what the company has seen elsewhere.
Likewise, the Motorola brand could help Lenovo crack the U.S. market, where it has virtually no market share among wireless users.
Motorola was founded more than 80 years ago in Chicago. The company, started as Galvin Manufacturing, created the Motorola brand of car radios and subsequently changed the company name to match.
Through the decades, it added televisions and set-top boxes for cable companies. 30 years ago, it launched its DynaTAC series of wireless phones, becoming the first manufacturer of commercially available cell phones.
by Chris Morran via Consumerist
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