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Lenovo takes over Motorola Mobility from Google

Google is selling Motorola Mobility to the Chinese firm Lenovo for $2.91 billion.

The offload is likely motivated by MM’s expansive patent portfolio, which was a crucial factor in Google’s 2012 acquisition of the unit. Lenovo will be able to license patents from MM, although full ownership will be retained by Google.

Lenovo has stated that it expects the unit to provide it with a “foothold” in Western Europe as well as a “strong market presence in North America and Latin America”.

The acquisition gives Lenovo control of the Motorola brand, along with the firm’s current and future products. The combined entity will have a 6% share of the global smartphone market – while this technically places it in third, it is still significantly less than Apple’s 15% and Samsung’s 32%.

Without Motorola’s portfolio, Lenovo is the fifth-largest smartphone manufacturer globally. Its business is based predominantly in its home market of China and other emerging markets, while MM has narrowed its focus to the Americas over the past few years.

Google CEO Larry Page noted that Lenovo was now a better fit for Motorola Mobility, saying: “The smartphone market is super-competitive, and to thrive it helps to be all-in when it comes to making mobile devices. It’s why we believe that Motorola will be better served by Lenovo – which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world.”

Motorola Mobility has been steadily losing money since Google acquired it in May 2012 for $12.5 billion. However, this total sum included roughly $3 billion in cash held by Motorola along with $1 billion of tax credits. Google has further offset this by selling Motorola’s home business to the Arris group for roughly $2.35 billion.

 

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