Motorola is no more a Google company, according to the official press release Google has sold Motorola to Lenovo for $2.91 Billion. The PC maker will pay $1.41 billion in cash and shares while the remaining $1.5 billion as a three year promissory note.
As a part of the deal Google will keep most of Motorola's patent portfolio alongwith current applications and invention disclosures. Lenovo however will get 2000 patents alongwith the Motorola Mobility brand name and all its trademarks, including the Moto Maker as well as a license to use the rest of Motorola's patent which will always remain with Google.
What happened?
Motorola was purchased by Google in 2012 for a whopping $12.5 billion. While there wasn't much going on within the company in 2012, the next year we would see Motorola launch the Moto X with various customization options and the built in the US tag (which Google tried with the Nexus Q and failed) and also the budget king, Moto G.
But that didn't help, Motorola kept loosing money every quarter adding to Google's woes. The reason for Motorola's acquisition was its vast patent portfolio, but it seems Google may have just over-estimated its value. Moto's acquisition created a rift between Samsung and Google. Although Moto was never a serious competition, Samsung saw it as a way of Google trying to gain a spot as a hardware manufacturer. Samsung seemingly started to distance itself from Android and Google, creating its own competitive services and app store for the platform alongwith its own OS, Tizen, to get out of Google's grip.
Samsung being the largest smartphone manufacturer in the world was someone Google didn't want to piss off. Recently both came into a pact where Samsung would tone down its own apps and skin on top of Android, and possibly Google will stop with its hardware ambitions, atleast in terms of smartphones. Another story which adds more credibility to this theory is, that Google is planning to retire the Nexus brand, instead you will have the flagship devices of a particular year available as Google Play Edition devices with the latest vanilla Android version.
The road ahead
Lenovo has been trying to dig its way into the smartphone market outside of China for quite some time. It tried to acquire BlackBerry , but regulators shot the deal down as Blackberry's are still the phone of choice for various Government agencies in the US and the thought of a Chinese company owning the brand sent a lot of National Security alarms.
With Motorola, Lenovo quite literally has the inventor of the cell phone at their behest. Moto is a world renowned brand and Moto G is shaping up to be a huge success for the company. Using Motorola's brand name and distribution circles, Lenovo would be able to introduce its own handsets in the US and UK, where it had failed previously.
At present it looks like the same deal IBM made back in 2005, where Lenovo purchased its PC unit and retained the ThinkPad name. Today Lenovo is one of the largest PC manufacturers in the world and the ThinkPad brand is still one of the best enterprise laptops out there. Motorola will indeed remain as a brand within the huge Lenovo Corporation, but it might just remain that. A niche unit which will fork out that one spunky smartphone each year or every alternate year, which will wow us, but we will still go with the Galaxy.
