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Wednesday, January 29, 2014

Google Sells Motorola Mobiltiy - BBC


Google sells Motorola Mobility unit to Lenovo for $3bn

Motorola phone Google said that the smartphone market was incredibly competitive

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Google has sold Motorola Mobility to Chinese computer maker Lenovo for $2.91bn (£1.8bn), in a surprise move.

Google bought the struggling US mobile phone company for $12.5bn in 2012.
Google will keep several lucrative patents, including the Android smartphone and tablet software. Lenovo picks up about 2,000 Motorola patents and the phone manufacturing operations.
In a statement, Google said the smartphone market is "super competitive".

"We believe that Motorola will be better served by Lenovo," Google added.

Acquisition spree
  The purchase of Motorola was Google's largest acquisition and it signalled a growing effort by the search giant to enter the hardware business.
Motorola Mobility created the Moto X and Moto G phones.

Analysis

Google always said the motivation behind buying Motorola's mobile phone business was its patents. This deal sees it keep most of them. That will help it fight future legal battles to protect its Android operating system.

The search giant had always kept the division at arms length, in part to tackle any perception that it would give its own hardware an unfair advantage against other phone sellers. The outcome was that third-party made Google Nexus-branded phones often stole the limelight.
Even when Google did invest in a reported $500m marketing blitz to promote Motorola's flagship - the Moto X - in the US, the brand only made slight gains in marketshare.

A sale to Lenovo means Google can stop worrying about Motorola clocking up further losses. It will now be interesting to see if owning the brand can help Lenovo to do what other Chinese smart device makers have struggled at: cracking western markets.

Despite the sale, Google chief executive Larry Page insisted in a blog post: "This does not signal a larger shift for our other hardware efforts."

The deal with Lenovo comes on the heels of an acquisition spree for Google.

In January, it snapped up DeepMind, a UK firm focused on artificial intelligence, and bought military robot-maker Boston Dynamics in December.

But Lenovo has also been out spending: this is the second big acquisition for the computer firm in recent days.

Last week, the Chinese computer manufacturer announced it had acquired IBM's low-end server business for $2.3bn.

Global ambitions
  In announcing Wednesday's purchase, Lenovo cited the strength of Motorola's brand, which has been revived in recent years with Google's help.

"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," said Yang Yuanqing, chief executive of Lenovo, in a statement.

"We will immediately have the opportunity to become a strong global player in the fast-growing mobile space," he added.

He also noted the acquisition gives Lenovo an entry into the North American and Latin American markets, as well as a toehold in Western Europe.

The transaction must still be approved by US and Chinese regulators.

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