Last week, news broke that Lenovo would buy Motorola Mobility from Google for $2.91 Billion, giving the Chinese PC manufacturer a respectable share of the smartphone handset market. This move has caused nearly as much unrest in the mobile industry as the announcement that Google would buy Motorola Mobility from it’s original parent, Motorola, Inc., back in 2011. Both moves caused quite the commotion, and both were a little bittersweet, but overall, two sales later, I dare to say these were some of the most important deals in the mobile space, and the industry would be a much worse place if these deals hadn’t happened.
In 2010, Motorola, Inc. was loosing money left and right. It’s handset business wasn’t doing very well, with a marketshare many times smaller than it had been just a few years earlier when the mobile space really took off, thanks to Samsung’s skyrocketing success. It’s business solutions department was doing okay, but not keeping up with the likes of IBM, Cisco, and others.
Meanwhile, Google was being indirectly attacked left and right, as it’s Android mobile operating system was at the center of literally hundreds of patient lawsuits, most notably the epic that was the Apple vs. Samsung suit, HTC vs. Nokia, Motorola vs. Sony-Ericsson, among many others.
It was soon decided that Motorola, Inc. would split, with the business solutions being renamed Motorola Solutions, and the consumer electronics business would be spun off as Motorola Mobility. Within months of the announcement, Google would acquire Motorola Mobility for $12.5 Billion, a deal that would include not only the handset business, but hundreds of patients which Google could use to defend the Android OS. However, there was some worry that with Google directly competing with it’s Android partners, those partnerships could become strained.
Google made good on it’s promise to keep it’s in house Android team separate from Motorola, patient lawsuits started to subside, and Google helped Motorola climb back into contention in the handset market. After the success of the DROID RAZR line of handsets, the newly Google owned Motorola released the wildly successful Moto X, followed by the budget-centered Moto G.
Now, three years after Google bought Motorola Mobility and practically turned the entire industry around, they’ve decided to flip Motorola, selling it off to Lenovo for $2.91 Billion. Before you start scratching your head at the nearly $10 Billion loss, Google is keeping all of those patients that came along with the deal 3 years ago. All in all, Google is coming out ahead.
This new deal is almost as important to the industry as the Google/Motorola deal was 3 years ago. Not only is Google keeping the patents, which will only further secure Android’s future, but by no longer directly competing with it’s Android partners, relationships can mend between Google and those partners, which will lead to further improvement of Android. This can be seen by the deal made recently between Google and Samsung, who’ve had a love/hate relationship for years, ever since Samsung started heavily skinning Android and directly competing with Google on the services offered through Android, replacing them with Samsung alternatives. Now, Google and Samsung will work together to make Samsung’s spin on Android beneficial to both companies.
And Those worried about all the good done by Google at Motorola Mobility need not worry, Lenovo is experienced at buying successful brands and keeping them that way. Most notably when Lenovo bought IBM’s highly successful “ThinkPad” line of PCs back in 2005, which is arguably even more successful now.
Overall, it is bittersweet to see this deal, as many ‘Googlerola’ fans were excited to see what Google might do with Motorola, especially with their pure Google experience Nexus and Google Play Edition lines of devices. But Lenovo is a worthy successor to Google, and this deal will only help further the mobile industry.
