In a surprise move, Google is selling Motorola to Chinese technology giant Lenovo for $2.91bn, after a lacklustre two-year effort to turn around the smartphone maker it bought for $12.5bn. The deal ends Google’s run as a handset maker after it biggest-ever takeover, which was announced back in 2011. It also provides Lenovo, with additional […]
In a surprise move, Google is selling Motorola to Chinese technology giant Lenovo for $2.91bn, after a lacklustre two-year effort to turn around the smartphone maker it bought for $12.5bn.
The deal ends Google’s run as a handset maker after it biggest-ever takeover, which was announced back in 2011.
It also provides Lenovo, with additional technology and manpower to expand its growing smartphone and tablet markets.
The deal could also help strengthen ties between Google and Samsung ,taking the web giant out of competition with Samsung, which is the biggest seller of its Android operating system.
Since its purchase of Motorola, Goolge has slashed the phone maker’s workforce from 20,000 to less than 4,000 and racked up losses of nearly $2bn (£1.2bn).
Larry Page, chief executive of Google, described the deal with Lenovo, which is best known for its range of computers, as an “important move for Android users”.
He also said his company would retain most of Motorola’s patents.
“The smartphone market is super competitive and to thrive it helps to be all-in when it comes to making mobile devices,” Page said.
“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. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.”
Under Google, Motorola launched a number of value smartphones, including the Moto G and the Moto X.
It also makes baby monitors, corded and cordless phones and fitness accessories.
The Lenovo deal is yet to be approved in either the US or China and Page warned this “usually takes time. “Until then, it’s business as usual. I’m phenomenally impressed with everything the Motorola team has achieved and confident that with Lenovo as a partner, Motorola will build more and more great products for people everywhere.”
A sale to Lenovo means Google can stop worrying about Motorola clocking up further losses. It will now be interesting to see if owning the brand can help Lenovo to do what other Chinese smart device makers have struggled at: cracking western markets.
Lenovo now third biggest smartphone maker
The purchase is set to make Lenovo the world’s third-largest smartphone maker behind Samsung and Apple.
In announcing Wednesday’s purchase, Lenovo cited the strength of Motorola’s brand, which has been revived in recent years with Google’s help.
“The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones,” said Yang Yuanqing, chief executive of Lenovo, in a statement.
“We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” he added.
This is the second major acquisition for Lenovo in the same number of weeks.
Last Thursday, the Thinkpad-maker announced it had acquired IBM’s low-end server business for $2.3bn, in what was then China’s biggest technology deal.
Google’s next hardware ventures- wearable tech, robots and AI?
Despite the sale, Google chief executive Larry Page insisted in a blog post: “This does not signal a larger shift for our other hardware efforts.”
The deal with Lenovo comes on the heels of an acquisition spree for Google.
In January, it snapped up DeepMind, a UK firm focused on artificial intelligence, and bought military robot-maker Boston Dynamics in December.
Read the Lenovo statement here
Read the official Google blog post here
