Google’s CEO Larry Page announced today that Google will be selling Motorola to Lenovo for $2.91 billion. This surprise move comes shortly after when Google acquired Motorola in 2012. While Google will retain ownership of most patents, Lenovo will acquire a license as well as 2000 patents.
“We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users. Over the past 19 months, Dennis Woodside and the Motorola team have done a tremendous job reinventing the company,” Larry Page explained in a blog post.
So why did they sell Motorola? Page explained that the smartphone market is “super competitive”, and Google believes Motorola will be better served by Lenovo. By selling to Lenovo, Google will be able to divert more of their energy into “driving innovation” to the Android ecosystem, therefore benefiting more smartphones running Android software.
Page also noted that today’s acquisition by Lenovo will not impact a shift from other hardware efforts. They described that wearable and home markets are quite different from the mobile industry, and Google is excited to build amazing products for consumers with emerging markets. So this could signal more focus on Google Glass, as well as a “smart thermostat” due to the fact Google has acquired Nest.
“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,” noted Lenovo CEO Yang Yuanqing.
With the success of Motorola lately, especially with the Moto lineup and DROID dries, we hope Lenovo will be able to take advantage of the brand, and push out high quality products that Motorola has been known for in the mobile market.
The deal will involve $660 million in cash and $750 million in stocks. As well, an additional $1.5 billion will be paid over 3 years.