Three years ago, Google splashed out $12.5bn for struggling mobile manufacturer Motorola, and on Thursday Google completed its sale of Motorola’s physical assets to Lenovo for just $2.91bn.
Not all of the money will be going into Google’s pocket right away, however. Lenovo is paying $660m in cash plus $750m in newly issued stock, and has signed a promissory note to deliver the remaining $1.5bn sometime in the next three years.
The transfer of Motorola to Lenovo from Google marks the end of a short chapter for the storied handset vendor. Credited with the invention of the cellphone, Motorola had suffered over the last several years as Apple’s iPhone and Samsung’s Galaxy lineup rose in prominence. Under Google, Motorola had refined its product portfolio to just a few devices, and developed a focus on the low end and on emerging markets with its affordable Moto G and Moto E smartphones.
One of the main reasons Google bought Motorola was to get hold of the firm’s patent library. Under the terms of its deal with Lenovo, Google keeps the vast majority of Motorola’s patents, although the mobile firm will bring around 2,000 of them to Lenovo. Motorola also has a license to use the patents Google is retaining, and any earlier patent cross-licensing deals between the companies will remain in place.
Meanwhile, Lenovo gets the manufacturing side of Motorola’s business and a brand that has excellent recognition in the US and Europe – two markets the Chinese manufacturer is desperate to crack. Lenovo has been talking for some time about buying a Western mobile firm – Blackberry has repeatedly been mooted – and now it finally has one.
Lenovo had previously stated that one of the reasons it bought the division was to take advantage of Motorola’s existing relationships with network operators in North America and Europe.
