Home / Lenovo, Google agree price in Motorola acquisition

Lenovo, Google agree price in Motorola acquisition

Chinese manufacturer’s spending spree continues with troubled smartphone maker

Lenovo will pay just $2.91bn for Motorola Mobility, less than three years after Google acquired it for $12.4bn.
Lenovo will pay just $2.91bn for Motorola Mobility, less than three years after Google acquired it for $12.4bn.

Chinese tech behemoth Lenovo has agreed terms with Google for acquisition of Motorola Mobility, online media reported.

Lenovo is amassing a reputation for buying up major properties at bargain prices. It is reportedly going to hand over just $2.91bn for Motorola Mobility, less than three years after Google paid $12.4bn.

ANALYSIS: Lenovo's Motorola acquisition - bargain or bane?

While on the surface, Google appears to have made a staggering loss, the Web giant last year sold Motorola Home to the Arris Group for $2.3bn and will also retain a reported vast majority of the patent portfolio, said to number around 10,000. Analysts believe the patents were Google's main target when it bought the company and that the move to now rid itself of Motorla Mobility will suit Google in a number of ways.

"Google creates a much simplified business environment by divesting itself of Motorola Mobility," said Ian Fogg, director, Mobile and Telecoms.

ANALYSIS: Lenovo's Motorola acquisition - bargain or bane?

"It removes the channel conflict with other Android smartphone makers because Google will no longer have its own competing smartphone hardware division... For Google, this deal is an escape from a difficult business position. When Google bought Motorola Mobility in August 2011 for $12.4bn, Motorola had 3% global handset market share. Now, it's around 1%.

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"Despite well-received smartphones such as the Moto X, Motorola has suffered from a lack of attention from Google, under-investment, and weak marketing spend compared with the smartphone market leaders. Google has been too focused on Android's overall performance and on intellectual property battles, to give Motorola the support it needed to turn around a struggling business."

ANALYSIS: Lenovo's Motorola acquisition - bargain or bane?

For its $2.91bn, Lenovo will get use of the Motorola brand, released handsets such as the Moto X and G, a future product roadmap.

"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, chairman and CEO of Lenovo, in a statement.

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

"Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem," said Google CEO Larry Page.

ANALYSIS: Lenovo's Motorola acquisition - bargain or bane?

"This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere."