You Got Something? Lenovo's Buying. Google Sells Motorola.
Subject: General Tech, Mobile | February 1, 2014 - 09:01 AM | Scott Michaud
Tagged: motorola, Lenovo, google
Lenovo has a few billion dollars to throw around, apparently. The company, typically known for consumer and enterprise PCs, just finished buying more food off of IBM's plate with the acquisition of their x86 server and mainframe business. That business was not as profitable for IBM compared to their rest of their portfolio. $2.3 billion, mostly in cash, was the better choice for them (albeit a reluctant one).
Not Google, either.
Lenovo has been wanting a bigger share of the phone and tablet market. Unlike when Google purchased Motorola, Lenovo was not as concerned with owning the patent portfolio. $2.9 billion is a small fraction of $12.5 billion sum that Google valued Motorola at, but Lenovo only wanted about a tenth of the patents. That said, a tenth of the patents is still a couple thousand of them.
For the longest time, I have been thinking that Google was going the wrong route with Motorola. It seemed like any attempt to use the company as a cellphone manufacturer would either bleed money in failure or aggravate your biggest partners. I figured it would be best for Google to pivot Motorola into a research company which would create technologies to license to handset developers. This could be a significant stream of revenue and a love letter to their OEMs while retaining the patents they desired.
I did not think to spin off or sell the rest.
Ironically, that is very close to what we have today. Google, eventually, got rid of the cellphone division except for their licensed "Nexus" trademark. Google kept their patents and they kept the Motorola research team ("Motorola Advanced Technology and Patents Group").
It does not quite line up with my expectation, however; at least not yet. The Motorola research team would need to produce technology to license to partners and maybe other handset manufacturers; also, the time they spent with their toe in handset development bathwater could have already harmed their relationships, irreparably.
As for Lenovo, it seems like a clear win for the company. Motorola still has significant brand power and an open dialog with carriers worldwide at a cost of just a few billion. I do have questions how Lenovo will integrate the brand into their portfolio. Specifically, which company's name will be on each product? I expect it would have to be "Lenovo" but I also believe they have to put the Motorola trademark somewhere, right?
Anyway, who do you predict Lenovo to purchase next? Has the insanity ended?