Article: Selling Motorola

by on January 30, 2014

Yesterday, it was announced that Google would be selling Motorola Mobility to Lenovo, about two years after initially purchasing the company, selling its cable box business, and releasing two arguably nice products (the Moto X and Moto G). The kicker is that Motorola was purchased for $12.5 billion and the remnants were sold for $2.91 billion.

A lot of people are focused on the much lower resale price, but Google did keep a number of items in the process—development and patents. Google plans on keeping the Advanced Technology and Projects group, which is responsible for things like Project Ara. Additionally, Motorola was the patent king of mobile communications, and in today’s world those resources are more important than people, product lines, or market share. Patent trolls have proven time and time again that even if you do not have a compelling product, you can at least sue.

That being said, I think the situation is bittersweet for Motorola. A lot were hoping that Motorola would become the unofficial Nexus line—simple, stock products portraying Google’s vision for Android. Products like the Moto X and Moto G gave glimpses at this, but sales still paled in comparison to devices from Samsung. While Motorola may lose some of the close ties to Google, especially as the shell of the shell of its former self moves to China (pending regulatory approval, of course), there’s a lot of potential for growth. Google seemed to treat Motorola like any other Google side product—something fun and exciting, but not the core of its business. Lenovo sees Motorola as a great way to break into the American smartphone market, much like purchasing the ThinkPad line from IBM got them into the American PC market.

Seeds Planted

Have you ever seen one of those movies where there is some sort of twist that you didn’t see coming, but once all the cards were on the table, it was blindingly obvious? I feel like that was the case with this Motorola deal, especially since earlier this week, Google and Samsung struck a deal to cross-license patents. Even yesterday morning, there were reports that Google put a bit of pressure on Samsung to be more Google-like with its implementation of Android or lose licensing to products like Google Maps.

If you own a smartphone manufacturer that’s losing money, and have a mostly-ally that is one of the biggest players in the industry, what would you do?

As someone watching from the sidelines, it’s hard to fault Google for their actions and this really does seem like a win-win for everyone. Google gets a powerful ally in Samsung. Lenovo gets a foot into the American smartphone market. Motorola gets a parent company that will probably support it better than Google ever did. Samsung gets access to all sorts of tasty patents. In other words, Google got a bigger nuke for its thermonuclear war with Apple, even though they may not want to admit it.

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