Google Sells Motorola Mobility to Lenovo
Google has surprisingly sold its subsidiary Motorola Mobility to Chinese smartphone manufacturer Lenovo. Google bought the company 2 years ago with the aim of breaking into the world-wide smartphone arena to complement its Android operating system.
Google paid US$12.5 billion for the company but have sold it for just US$2.9 billion which involves a part cash payment and the rest in shares.
Google will hang on to the majority of Motorola Mobility’s patents with Lenovo being issued a licence to use the portfolio of patents. Lenovo intends to keep Motorola's distinct brand identity.
Lenovo achieved 7th position in worldwide smartphone sales to end users in Q3 2013 with nearly 13 million sales. However, in a recent report Gartner Analysts outlined “Lenovo continues to rely heavily on its home market, which represents more than 95 per cent of its overall mobile phone sales. This could limit its growth after 2014, when the Chinese market is expected to decelerate,”
With Lenovo relying so heavily on home market sales it seems logical to acquire Motorola Mobility with its well-known brand in Europe and the Americas.
Google meanwhile, intends to focus on Android and smart devices such as Google Glass. The sale also removes any doubt from within other smartphone manufactures that Google was in a position to favour its own subsidiary over outside vendors.
Why did Google buy Motorola Mobility ?