Lenovo Buys Motorola Smartphone Business for $2.9 Billion
On Wednesday, Google has announced that it is selling its Motorola smartphone business to Lenovo for $2.9 billion. The sale includes $1.41. billion in cash and rest amount will be paid by Lenovo stock.
This deal will help Lenovo in getting better position in smartphone market and specially in North America. Morotola currently makes Moto X and Moto G smartphones.
— Lenovo (@lenovo) January 29, 2014
Google will retain majority ownership of the patent portfolio of Motorola. Lenovo is picking the phone manufacturing and about 2000 patents. Lenovo will not get the advance research unit of Motorola which is working on Open hardware project Ara, modular smartphone project.
“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere,” said Larry Page, CEO, Google.
Larry Page confirmed that Google Bought Motorola for its Patent portfolio but serving a smartphone company seems bit hard for Google. This is the reason they are selling Motorola.
“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,” He added in official blog.
“As part of Lenovo, Motorola Mobility will have a rapid path to achieving our goal of reaching the next 100 million people with the mobile Internet. With the recent launches of Moto X and Moto G, we have tremendous momentum right now and Lenovo’s hardware expertise and global reach will only help to accelerate this,” said Dennis Woodside, CEO, Motorola Mobility.
Google acquired Motorola for $12.4 billion in 2011. Since then, Motorola has lost nearly $2 billion and trimmed its work force from 20000 to 3800.