Google to sell Motorola to Lenovo for $2.9 billion (Updated – official!)

January 29, 2014

    Motorola X Phone Ad

    Update: it’s official. Lenovo will pay $2.91 billion for Motorola, with $1.41 billion immediately, and the rest over a period of three years. Lenovo will gain all of Motorola’s assets, approximately 2,000 patents, and a license for the Motorola patents kept by Google.

    According to Reuters, citing people familiar with the matter, Google will receive $3 billion for the phone maker, in a deal that also includes some patents. The deal is said to be close to finalization – TechCrunch reports Google has actually hold off the sale due to tax reasons.

    Google acquired Motorola Mobility back in 2011 for a massive $12.5 billion, in what most industry watchers defined as a patent grab. At the time, Motorola was losing money and market share at an accelerated rate, but the storied company still had a trove of mobile patents that Google could use to shore up its defenses in the ongoing patent wars.

    Motorola has been bleeding money ever since Google acquired it. Despite the release of the moderately successful Moto X followed by the popular Moto G, the company lost a quarter of a billion in the last reported quarter, and there were no signs of improvement.

    Strictly financially speaking, Google is likely walking away with a loss from the entire affair. However, the company will get to keep most patents and a license for the patents that are going to Lenovo.

    For Lenovo, the deal offers a bridgehead to the lucrative and strategically crucial North American market. The Chinese company is the largest PC maker in the world, and has a serious presence in the US through its PC business (and, as of this week, server business). Lenovo only recently tackled the smartphone business, but has already established a strong presence in China and other Asian markets. With Motorola in its fold, Lenovo can move to aggressive international expansion, backed by a prestigious and well-known brand that still has a loyal user base.

    Google drops hardware, Samsung scales down software. Coincidence?

    The context of the deal is very interesting – just hours ago, news broke that Samsung agreed to scale down its customization of Android at Google’s request, in a broad agreement that one source defined as a “sea change”. And earlier this week, Google and Samsung announced a decade-long IP partnership that entails cross-licensing all existing and future patents.

    It’s possible that Google’s offloading of Motorola is part of a strategy to align closer to Samsung. It’s all speculation at this point, but some really big pieces of the puzzle seem to be falling into place: Samsung agrees to scale down its software ambitions, while Google gives up on its hardware arm and stops putting pressure on Samsung with super competitive devices like the Moto G.

    Stay tuned for more coverage.

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    Comments

    • jusmyopinion

      nooooooooooooooooooooooo

    • http://skyledavis.blogspot.com/ S. Kyle Davis
      • apianist16

        You saved me there, man. I was about to say this report was bogus. :)

        • http://skyledavis.blogspot.com/ S. Kyle Davis

          I was staring at my screen going, “No way!” And then I saw that post go through on G+.

    • samicide

      That’s bad news as a Droid Maxx user I can only say, NOOOOOOOOOOOOOOOO!! (In the anguished Darth Vader voice)

    • WestFiasco

      Just when i made up my mind motorola was going to be my go to OEM for my next phone, they get bought by lenovo of all companies.

      • apianist16

        Cheer up! Lenovo isn’t so bad. They could have been bought by Samsung. :)

        • WestFiasco

          Judging by the latest rumors about Google and Samsung I don’t know if that would have been a bad thing. I’m not a fan of Samsung by any means but I have no love for Lenovo’s mobile devices.

          • apianist16

            True. We’ll just have to wait and see how everything develops.

    • cycad007

      Damn it….now I want to trade in my Moto X. :(

      • Guest123

        If Lenovo continues to run them like Motorola has been doing this past year then things will be good. . . but I highly doubt that will happen.

        • Matevz

          I think Google is to credit for the past years success of G and X.. Motorola itself would never be able to sell those phones with price tag that low…
          Now you have 2 not-successful companies together.. Moto that was dying and Lenovo that was never even alive… What good could happen from this..

          • Shark Bait

            Yes google did a great job turning mpto round, which leaves me shocked at the price, and the new owner. Surely another American company would have been a better pearent

            • Matevz

              I would love to see HTC and Motorola parter up :)

            • Shark Bait

              I’m no so sure, mixing an Asian an American company will always result in job losses since labour is usually much cheaper I’m asia.
              HTC would have been a better purchase for lenovo in my opinion, and dell would have been good for Motorola since they both champion customisation

            • AussieGreek

              Your right Motorola and Dell are better suited because they’re both good at making losses.

            • Shark Bait

              Where has that number came from?. I think they definatly have turned moto around, it may not be a major success but they have defiantly created a launch pad to send it in that direction !

            • AussieGreek

              A 384 million dollar loss is a turn around and a success?????

            • Shark Bait

              I never said success!

          • mrjayviper

            you seemed to forgot the prices when this phone was launched. And it stayed that way for several weeks/months too.

        • RanRu

          I think it boils down to whether or not Motorola can justify the risks and ambition that they’ve demonstrated lately without the safety net of Google’s bank accounts.

          If Motorola can turn a profit, and Lenovo doesn’t get money grubby, they should be able to continue operating in WoodsideWoodside’s current vision.

    • John Hamernick-Ramseier

      What is with all the hate of Lenovo buying Motorola? I hope that Motorola keeps with the direction they are currently going.

      • mrjayviper

        knee jerk reaction I think. I think this sale would improve the availability of Motorola phones in countries outside of the US/Canada.

      • Jesus

        I think it’s because Lenovo is a CHINESE company.

    • Murat

      nonononononooooooooooooo
      Dammit I was seriously considering the moto x 2 as a replacement for my n4…but of all companies they had to choose lenovo? Really?!

    • http://skyledavis.blogspot.com/ S. Kyle Davis

      I don’t really get all the Darth Vader “Noooo!” going on. Lenovo’s PCs are extremely well made. Reason to believe that Moto phones are suddenly going to suck? Though, the US to China thing is annoying:

      • samicide

        I love my Droid Maxx but I’ll be leaving Moto behind for my next phone and follow whoever Google seems to buddy up with the most. The moto updates will probably get very slow now.

      • Steve

        I second that and i think i still would like to have the Moto X thinking I will chance it.But like you the American jobs and the China thing annoying to me also. The American thing was a big part of the Moto X decision for me.

      • RanRu

        Lenovo makes good PCs, but their mobile phones are notoriously bad, hence why they aren’t really available outside of China.
        If Lenovo keeps Motorola at a distance and allows Woodside to continue running the company as he is, there shouldn’t be any problems. I’m concerned, however, that they might try to intervene in the interest of higher profit margins. Now that Moto no longer has Google’s bank account as a safety net, I’m afraid they might not be able to afford being as ambitious as they have been.

      • Neil

        I hope that the quality stays up. I rather like Moto smartphones. Lenovo isn’t small, so let’s hope they grow Moto.

        The Thinkpads have done well under Lenovo. So why I’m disappointed Moto was sold, I suspect the replacement for my Moto X in a year or two will be another Moto. If anything, this should accelerate development of a large screen phone and a more ‘camera phone.’

        Am I the only one here who sees a ‘win-win?’ This will really take some heat off Google while granting them the patent rights….

    • Cal Rankin

      If they get rid of the vanilla flavor, I’m going to downright angry.

    • RanRu

      Well, that was fast. Ideally, Lenovo won’t have anything to do with Motorola. At all. We can see what a good job they did with their own phone business.

    • deepen915

      so what about the US Production of the Moto X and G? I’m sure Lenovo, a Chinese company would want nothing to do with US manufacturing?

    • Fatal1ty_93_RUS

      Rest in peace, Motorola…

    • iamtravis182

      This is disappointing. I guess we now have to question how much of the “new” Motorola that we have seen this past year was because of Google’s influence or on their own accord. Time will tell.

    • Groud Frank

      My plans for making Motorola my go too OEM(because of their close relationship with Google and ability to provide quick updates) are all down the crapper now. No longer envious of you Moto X owners; good luck dealing with Lenovo.

    • MadCowOnAStick

      ..

    • Matevz

      Wooow the next year or 2 might be VERY interesting :) Big things could happen.

    • Jesus

      Lame, I just bought a Moto G.

      I don’t want to support some Chinese company.

      • Matevz

        you dont lol.. what you’ve bought, you’ve bought. The money went to G. The problem is: Will Lenovo support you? (updates)

        • Dario · 753 a.C. .

          what about moto g now?? they still sell it?? is it still a motorola or lenovo??

          • Matevz

            I would say yes.. The have like few million in stock in warehouses and shelves.. it is not going to instantly transform into Lenovo phone in your hand :) Next phones will be by Lenovo-Moto.. and i think updates will slow down since Google is not in charge anymore..

            • Dario · 753 a.C. .

              ok.. are you sure lenovo, now, will use android again? we don’t know it.

              and what do you think of lenovo about phone part quality for example calls, signal reception and all those things where motorola was great?

              i just wanted to buy a moto g only thanks to materials and phone compartments (calls, signal etc)

            • Matevz

              I am sorry but i’ve never owned a Lenovo nor Motorola smartphone. But if Lenovo is any smart they will head for Android. I would… Lets face it, they are on the edge of dying (what is the Lenovo market share), why taking any further risk with other OS if Android by far the most popular. And as i understood all the licences and patents that Motorola owned, still does. So does Google but i think Lenovo will be able to use that without Google breaking their neck… After all, Google is not know as aggressor. They just wanted to cover their asses not to get sued…

            • Dario · 753 a.C. .

              ok thank you :)

            • Matevz

              Just expressed my thoughts, no need to thank lol :) Cheers mate

            • cee

              If I was Lenovo, I would buy Samsungs share of Tizen, offer it to all phone manufacturers with one release date for all partners. If they did this, got some really good interface and UI designers, they would destroy Android. Tizen kicks Androids arse in performance terms, just need better interface and UI.

      • Steve

        So how do you like? The phone.

        • Jesus

          It’ll come some time this week!!!

    • blob2

      Nexus 6 made by Samsung. Confirmed.

      • cee

        to be sued by Phillip K Dicks family on release date!

    • mrjayviper

      I think it was first reported that Google really wanted Moto just for their patents. Nothing extraordinary with this sale I think

      • Matevz

        We all knew that acquiring Moto would benefit G massively. But “The Big G” did not have a hardware manufacturer, so it had to do “deals” with LG, HTC, Samsung. I was sure Moto was the one to produce Nexus line for them. And with quite the success of the Moto G and X i was sure this will stick… Sales were high… Why the heck sell something that was working, unless greater plan on the sight… What are Samsung and G up to…

        • cee

          Google are trying to kill Tizen, which is superior to Android. Innovation, my arse

    • Jayfeather787

      Damn it.

    • Shark Bait

      Holly crap

    • jc914

      NOOOoooooooooooo.

    • José Martins Neto

      I’m done with this $h@T!!

    • Julian Casio Santana King

      And there goes my hope of a moto nexus

    • Shark Bait

      Wow something serious must have happened between Google and samsung…… Something big enough for google to take a $5 billion hit!!!

      I am shocked at this, I thought a Motorola sale would come but not so soon, or for so little, or to Lenovo. Google turned moto around , created great phones , and even more importantly, revived the brand. People responded well to moto, it looked cool again. The made in america was the icing on the cake which make the lenovo choice baffling. Surly their must be american companies better placed to take custody of moto??

      On the hole, android is probably safer, but has lost a strong manufacturer

      • Matevz

        Google just wanted Moto’s patents… Moto was not good enough for them as OEM. They want the best… they will not accommodated with “meeh, it’s ok…” they will only take the best… THEY ARE GOOGLE… the strongest tech company in the world… SAMSUNG is the one they want, at least it seems so :)

        • Shark Bait

          I think your right, I didn’t want to believe the patent think at first but now I do.
          Its very true. They are the greatest and only the best will do for google so they are abandoning ship and jumping aboard the SS Samsung. Its probably the right thing to do, after all they make lots more money put of samsung than they do moto

    • jjordan

      This sucks for 2 reasons google gave motorola the ability financially to push forward with project ara which would have turned the smartphone market on its head and 2. Phones like the moto g and the 50 dollar smartphone that Dennis Woodside has been talking about are a thing of the past now….This is bad news for consumers

      • Shark Bait

        Google is Still keeping the project ara bit so their is still some hope. And I suppose of any one will drive down prices its the Chinese, unfortunately this will likely be at the expense of us jobs

    • AndroidBoss

      No!

    • Matevz

      But if Google actually parters Samsung… i think this is going to be smartphone domination. No competition at all…
      Damn, Google starts to scare me..

      • Dale2

        and the price will double

    • Xavier_NYC

      So they bought it for $12.5 billion but only got back $1.91 billion? That sucks.. I kinda figured they would sell though because they kept making Nexus devices with other companies and not their own.

    • David Rutla

      This is why I hate my own country. They always sell to China which will screw jobs for american citizens and turn the manufacturing plant into a cotton mill or something stupid

      • Matevz

        Dude, this is not just your country. It is happening everywhere… it is called capitalism.

        • man x

          You may never see the word motorola again dam shame to sell a name brand like that

    • trwb

      Google is fcking nuts. Thanks for exporting jobs to China. Thanks Google.

    • Rooney-

      I cant see motorola like this :(

    • John-Phillip Saayman

      What the hell is going on in the Android world

    • Valtheus

      No more “A Google company” under motorola brand. Too bad. Besides design, specs and price, Moto X and Moto G offered the “stock android experience”. What now?

      I am not sure if this is good or bad news for us consumers, but i lean towards bad.

    • Cole Raney

      And there went an american OEM. Now the only american OEM that is known by most people is Apple.

    • AussieGreek

      The truth is google doesn’t know how to make a phone. The moto x was a mid spec plastic phone sold for top dollar that no one wanted. if it wasn’t for HTC in the beginning and Samsung now android would be nothing today.

    • DOSS

      I like google over apple as I thought they cared about customers and how they feel not just pure profits. I had the iphone 5s and returned it to get the Moto X as I believed in Google and wanted to support them. Since they dont care about me I’m switching back to apple with everything. At least I will feel special.

    • Luka Mlinar

      “bleeding money” no shit. Serves you right for putting one of the best mobile company’s in the world the worst possible hands. I should have seen this coming. Guess no one told Dennis his actual job was to make money. If they came out with a 5 inch S800 like everyone else, they would be in the green. Fučk! Love Motorola, but not a fan of Lenovo. Not one bit.

    • Ashish Kumar

      The Question is that will Lenovo make a IBM out of Motorola ? droid-bug.tk

    • cee

      Good to see Google showing its true colours, stifling innovation, patent trolling while destroying a US ‘institution’, Motorola.

      First telling Samsung to stop developing Android, and I can guarantee that Samsung will suddenly drop Tizen, the real reason behind this ‘agreements’.

      How many jobs will be lost in the US? How popular will that be in the US?

      DARPA, CIA, NSA, and now Samsung are partners of Google, and what demands will Samsung place on Google? Yeap, you guessed it, they won’t want Android on non-Samsung devices.

      Have a look at Lenovo’s pc’s, IBM sold its pc business nine years ago, the design is exactly the same! So I can’t wait for the next model of Motorola, it should remain the same for at least nine years!

      Stifle innovation, stifle innovation, stifle innovation.

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