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Rumor: Google to sell Motorola's hardware division to Huawei

April 12, 2012

Almost a year has passed after Google had announced plans to acquire Motorola Mobility and the deal is still not sealed, with Chinese regulators delaying the whole shenanigan.

However, it’s pretty obvious that the deal will become official and final in the near future, so our focus is now on a different aspect of the transaction. And that is the actual reason (or reasons) why Google has paid $12.5 billion for buying a company that didn’t do very well in recent years and seemed to be going on a slow, but sure road to bankruptcy.

Rumors and speculations have been coming from all around these past few months and two equally strong possible reasons have surfaced. On one hand, the vast majority of business pundits stated that the acquisition’s primary goal was for Google to get a hold of Motorola’s extensive patent portfolio, which should solve most of the company’s legal problems with Apple, Oracle and other firms suing the search giant lately.

On the other hand, there were those, especially Android enthusiasts, who didn’t exactly have “sources from the inside” who thought (or rather hoped) that the merger would be Google’s first step towards becoming a hardware-manufacturing company.

We all dreamed at some point of a “Motorola Nexus” smartphone and it was (kind of) logical to assume that Google might be trying such a push, with the aid of Moto’s handset division. However, this possibility didn’t exactly ring true for anyone who tried to look at the wider picture of the smartphone market, because if Google would have actually started building devices, they would most definitely lose the trust of their present partners in the business, like Samsung or HTC.

Could Huawei become a force to be reckoned with?

So, up until now, there were two possible reasons that could have explained Google’s Motorola acquisition, but we clearly leaned towards one of them. However, if in fact Google only bought Moto for its patents, what did Larry Page and Sergey Brin have planned with Motorola’s hardware division?

It’s pretty obvious that you can’t spend $12.5 billion to buy such a giant and then simply dismantle or disband its most significant (and once upon a time profitable) division, so there has to be something done with Moto’s hardware department.

It’s likely that Google has realized they have threatened the very foundation of Android by alienating and angering their key partners – namely HTC, Samsung, LG, and Sony. Because of this, they likely have realized that there is only one thing to do – keep those juicy patents, and sell, sell fast, and sell to the highest bidder.

And that highest bidder might be Huawei, a rising giant in China, if we are to believe recent reports from the savvy sleuths at the Wall Street Journal. While some may not take kindly to the selling of an American company (or at least part of it) to a Chinese firm, it’s the most logical thing that could happen right now, both for Google and for Huawei.

The Chinese technology giant is currently planning to take the US and European smartphone markets by storm by launching high-end devices at affordable price points and, while they have demonstrated that they are capable of doing that on their own, Motorola’s brand and hardware division could prove very useful  in their pursuit of ever-more market share in the hard to crack Western mobile tech market.

Google, on the other hand, needs to solve this kerfuffle as soon as possible, before enraging the guys at Samsung, HTC, Lenovo, Acer, Sony and so on, or risk losing arguably some of the most important fans they have.

Google, Motorola and Huawei have all declined to comment on the rumor, but, for the time being, we should keep in mind that there’s still a long way before such a deal could go through.

Before anything, Google needs to have the Motorola merger complete and official, which should happen in the coming weeks or so. In the meantime, we should all have a little patience and wait for official news on all these tangled matters. And don’t forget to keep in touch with our website to find out more about these “dangerous liaisons” between Google, Motorola and Huawei.

And, if you would like more insight into this complicated world of mergers, sales, and more, be sure to read up on the Android OS being forked, and the rumor that Google has seriously enraged its key hardware partners by purchasing Motorola in the first place.

Would the sale of Motorola’s hardware division be a wise move for Google?