8 ms·

Lenovo to acquire Motorola Mobility

229 points by palebluedot 13y ago

tking8924 13y ago
"Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem." Well that settles that question at least.
Oculus 13y ago
Google lost about ~$9 billion on Motorola (~$12 Billion acquisition and now a ~$3 billion sale). This happened in the span of 2 years. You could throw $100 over your shoulder every second for those two years and that still wouldn't amount to $9 billion. We're the patents really worth that much? Edit: To anyone who uses the recent news about Google being forced to pay a percentage of their AdWords revenue to a patent troll: couldn't you spend $9 billion on lobbying to end this whole disaster of a patent system forever?
- loxs 13y ago
  What happened is not exactly that: https://news.ycombinator.com/item?id=7147251 https://news.ycombinator.com/item?id=7147251
- psbp 13y ago
  $12 billion - $3 billion - ~$2 billion (motorola home) - $3 billion motorola cash - whatever tax incentives over the period of ownership. They made it out ok.
- palebluedot 13y ago
  That's not really true, though. Motorola Mobility had ~$3B in cash at the acquisition point, and Google immediately sold off the cable box unit to Arris for $2.35B. Add in the ~$3B from this sale, and we are now at a cost of ~$4B. And I believe there were several tax advantages for Google, so it wouldn't surprise me if this whole acquisition only cost around $1B or so (and they keep the patents).
  - Oculus 13y ago
    Ok, not as bad as I originally calculated. If that money went to lobbying though, it'd be fair to argue that they'd be closer to solving the fundamental issues there are in patent laws vs. acquiring a portfolio of patents that are only a temp. fix.
    - aragot 13y ago
      Is there any study that shows the cost of lobbying (in the case of moving major ideas like patents)?
      - dublinben 13y ago
        Only after the fact. Successful lobbying has a very high return on investment, but it's also pretty risky.
    - 51Cards 13y ago
      Sadly one has to bring a gun to a duel, because if you are going to wait for gun lobbying to stop your duel, you're probably going to get shot in the meantime. Not that lobbying isn't good in the long run, but you still need protection right now.
- shimon_e 13y ago
  > At $12.5B, Motorola is Google’s largest acquisition to date. Google paid $40 / share in cash, but received ~$11 / share in cash and $8 / share in deferred tax assets. Thus the value ascribed to operations + patents was about $21 / share, or $6.3B, reflecting a multiple of ~0.5x sales and 12x EBITDA. Now adjusting this further for the $2.35B total consideration Google is expected to receive for the Motorola Home business, we get a purchase price of just under $4B for Motorola's handset business and patent portfolio (17K patents and 7.5K patent applications). http://www.zdnet.com/googles-motorola-purchase-was-it-worth-it-7000009356/ http://www.zdnet.com/googles-motorola-purchase-was-it-worth-...
- DannyBee 13y ago
  " couldn't you spend $9 billion on lobbying to end this whole disaster of a patent system forever?" No. It wouldn't even help. Can folks please get over the idea that just throwing X dollars into lobbying somehow will magically get them what they want from congress. Especially not when you have other tech giants on the other side.
  - Oculus 13y ago
    Are there really tech giants that are totally ok with our current patent system? I was under the impression that no company was happy, just some (e.g. Intellectual Ventures backers) are making due with what they can.
    - sangnoir 13y ago
      Yes- those with large patent pools. IBM and Microsoft, chief amongst them.
cdooh 13y ago
Patents are messing up valuations of these companies...
UncleChis 13y ago
May be they need money for the Nest deal (just kidding). Very strange to think of the recent Nest acquisition and this sale! Someone opens my eyes please!
- nuclear_eclipse 13y ago
  I was really hoping they'd be using the Nest acquisition to get some more hardware design talent on the Motorola team, but now I'm just baffled...
- dclara 13y ago
  To my understanding, Google will devote their energy to the new market, such as robot and home automation, plus Glass and self-driving car, which is already enough to deal with for a software company. No need to compete in the smart phone market with lower margin any more. Focus is very critical to a company's success and sustaining in business.
- shliachtx 13y ago
  It seems that Google isn't interested in being just another hardware/phone manufacturer. They want to make revlutionary and unique products. So they sold Motorola, but kept the R&D division. The same goes for why they bought Nest, are investing Google Glass, etc. - they want to be on the next frontier. Plus, they just built a great Android partner/manufacturer that will (if Lenovo is smart) continue to promote [near] pure Android and the Android ecosystem.
pearjuice 13y ago
>Lenovo intends to keep Motorola’s distinct brand identity--just as they did when they acquired ThinkPad from IBM in 2005. Are you fucking kidding me, Google? I don't know if you guys noticed but Lenovo completely ruined the ThinkPad brand into some average consumerist brand for their own good. They even went full-house when their Edge series lifted on the successful ThinkPad brand but was nothing more than that, a laptop with a name it couldn't live up to. I fear the same to happen with Motorola Mobility. With the Moto G the entire smartphone market was completely disrupted because Google showed pathetic Android consumerist brands how good a low-budget phone can be; sometimes it performed even better than the more expensive "high-end" varieties. If the rumors are true and Google will also abandon the hand-tailored Nexus line-up in favor of bidding-wars for Google Play edition phones of the same consumerist brands, it's finally over. When the Moto G was announced I had the same buzzy, warm, tingling feeling when Google started shipping the Nexus One. Now, I am realizing these will soon be vague memories to an era where smartphone users got value for their money.
- chris_mahan 13y ago
  They divested a business they couldn't profit from. I say good for them. What Lenovo does going forward is not entirely clear. On Google not selling devices anymore: the Chinese manufacturers have won, and they will flood the US market with great, inexpensive devices. They are going after the great unwashed masses who want smart phones, all over the world. Billions of them. Only they can supply the phones, so Google wisely exits the race, and will stick to what it knows best: software.
pavlov 13y ago
Next year, Microsoft will buy Lenovo for $22 billion. It will nicely round out Microsoft's already expansive Xbox+Surface+Lumia hardware division with a full range of PCs and x86 servers. Perhaps more pressingly, the deal will also ensure that the only growing PC maker stays in Microsoft's camp and abandons its flirtations with Android... The last remains of Motorola Mobility will be dissolved into the MS division that was formerly Nokia Mobile Devices, completing a surreal cycle of acquisitions.
- buster 13y ago
  I think you can be pretty sure that no company will buy Lenovo. Not only because it's big and expensive but because it's a chinese company. It's one of chinas gateways into the western market. The government won't let someone buy Lenovo, for sure. If someone buys a company it will be Lenovo, increasing its portfolio and pushing into US and european markets.
  - o0-0o 13y ago
    Chinese companies are not off limits for purchase. They just need to mature a bit, become more sophisticated, and distance themselves from their repressive government. After that, the suitors will come.
    - buster 13y ago
      How much more mature should a company become that owns IBMs hardware business and one of the oldest and the most renowned mobile companys. How much more mature as "largest telecommunications equipment maker in the world" (which is Huawei)? A US company will never buy such a company. What happened in the past was them creating Joint Ventures with western companys or buying them straight away to get into other markets. It's just too much of chinas next step after manufacturing the low cost goods of the world, to create the high-tech as well. And of course to sell it to you and me. And that's politics as much as economics.
    - toyg 13y ago
      Even if you were right, this will not happen in a couple of years. It certainly won't happen on the watch of current Chinese leadership, their plan to "move up" in the production chain being quite clear and well-known.
lispsil 13y ago
Damnit, I used plenty of moto G's for android development they were great mainly because you could actually buy unlike Nexus constant shortages. Lenovo like most Chinese corps not friendly to open source I imagine they will replace fastboot with some crippled proprietary junk, and be unfriendly to kernel mods
- Mikeb85 13y ago
  Really? Thinkpads are the most recommended laptops for running Linux. When I ordered mine, Lenovo even gave me a discount when I told them I didn't want Windows and wanted to run Linux. They even have certified some of their products for Linux... Not sure where you get your info.
  - lispsil 13y ago
    Inexpensive mobile market in China is 90% closed source or reluctant open source where they give you something thats almost entirely blobs to barely satisfy GPL. https://productforums.google.com/forum/m/#!topic/mobile/KnEnIGdi5mo https://productforums.google.com/forum/m/#!topic/mobile/KnEn... Most are squeezing all they can out of the MTK chipset and don't want their competition to know their mods. I'm betting they will flood US market with $80 MTK phones under the motorola brand
    - deleted 13y ago
      [deleted]
      - shimon_e 13y ago
        Yeah they do. Heck even the Yoga 8 uses MTK. http://en.wikipedia.org/wiki/Lenovo_A750 http://en.wikipedia.org/wiki/Lenovo_A750
        deleted 13y ago
        [deleted]
      - 13y ago
dudus 13y ago
This comment on the post summarizes well >> Nicolas Charbonnier Moto total cost $12.5B to Goog in 2011: - $3.2B Moto's 2011 cash - $2.4B Moto's 2011 deferred tax assets - $2.35B Moto's Set-top-box business sold in 2012 - $75M Moto's factories business sold in 2013 (incl 7K factory employees) - $2.91B Moto's Mobility business sold in 2014 Thus Moto's remaining assets including patents, buildings (in Chicago and elsewhere), probably a good part of the 12K employees cost Goog $1.56B Doing that, Goog may have well protected and guided the Android ecosystem along in the past couple years.
- kyrra 13y ago
  I thought the Chicago (technically the Schaumburg office I believe) moto office was part of the Mobility group? Google is retaining those people?
  - pavanred 13y ago
    Motorola Mobility office is in Libertyville and they are currently moving some employees to an office in downtown Chicago.
  - budu3 13y ago
    You're confusing Motorola Solutions headquartered in Schaumburg and Motorola Mobility headquartered in Libertyville.
- graving 13y ago
  Those numbers don't include Motorola's increasing losses under Google. http://static1.businessinsider.com/image/52605103ecad0479335c44d0-960/chart-of-the-day-motorola-losses.jpg http://static1.businessinsider.com/image/52605103ecad0479335... The loss for the latest quarter will be announced tomorrow.
- dclara 13y ago
  This looks more clear. They pretty much got everything back except the tax liability payment plus the valuable patents remained. Not a bad deal. And I think it's a positive move to put the hardware design and manufacturing back to the hardware company to compete in that market sector. The only sad thing is Android's future.
ChuckMcM 13y ago
Interesting, Google really really really doesn't want to be in the physical goods business, and yet they are buying robot companies. This is the first time I believe a large 'service' company is struggling with businesses in the "goods" side of the economy, we have seen many companies like IBM who started out all 'goods' and have been moving into all 'services'. Pretty good win for China as well.
- bliti 13y ago
  Robotics is currently more about software (CV, ML, etc) than hardware. Mechanical engineers can really build one hell of a robot, electrical engineers can wire it beautifully, computer engineers can create an awesome processor for it, but software engineers are still catching up. That is where Google seems to be taking interest. Once machines are able to "see" and recognize the outside world then learning about it is simply more of a time constraint than anything.
- patrickaljord 13y ago
  Not sure if you read the article but it says: "But the smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices. It’s why we believe that Motorola will be better served by Lenovo. (...) As a side note, this does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry. We’re excited by the opportunities to build amazing new products for users within these emerging ecosystems." I read it like this: "smartphones are turning into commodities and though they are not as commoditized as PCs yet they're on their way, Lenovo is good at selling commoditized low margin computers already. We're focusing on wearable and robots where the potential for growth is much stronger for us." Just a wild guess.
- dclara 13y ago
  Don't quite agree with you on that they don't want to be in goods business. They just bought Nest. It depends on Google's overall strategy to occupy the future market. Smart phone will have less margin and too much competitions. But I agree that either way will not generate good results. Companies have to keep moving anyways.
shmerl 13y ago
I worry about patents. Can Google ensure they will never be used for aggression prior to selling it?
- timv 13y ago
  They're not selling the patents.
  - michaelcampbell 13y ago
    I believe they're not selling ALL the patents.
mrich 13y ago
Google is happy to strengthen another Android OEM to balance out the ecosystem, keeping Samsung from dominating. They focus on the software which is their strength. I'm curious whether they have some clause to keep Lenovo from dropping Android in the next x years. Sounds like a bad deal at first, but considering this and looking at the numbers it's a good move for both companies.
- thethimble 13y ago
  Even without the clause I doubt Lenovo would choose to drop Android. With the Moto X/G, Motorola has strong momentum as an Android handset manufacturer. This includes consumer expectations that it will continue to make Android devices. Since Lenovo has no desire to (and is too late to) start a forked Android ecosystem a la Amazon/other Chinese manufacturers, sticking with Android makes the most logical sense.
rebelidealist 13y ago
Loving the G+ comments for Larry Page about the Motorola sale. Internet honesty at it's finest. https://plus.google.com/+LarryPage/posts/5D1jYPmdNTc https://plus.google.com/+LarryPage/posts/5D1jYPmdNTc Interesting to see what happens when the CEO is talking directly with the public on a social network.
ulfw 13y ago
With the sale of Motorola, the intro of Chrome Apps for Mobile, the stepping down of Andy Rubin - is Google losing interest in Android? When will we see ChromeOS for Mobile?
npalli 13y ago
Interesting set of moves by Google. Few observations 1. A lot of people are fixated on the sales prices and the $9.5 Billion “loss”. Contrary to gloating from Apple fans, looks like in the final analysis Google paid about $3 Billion for “majority” of the Motorola Patents. Not a terrible deal. 2. Apart from the patents, one reason for the Motorola purchase was to provide some competition to Samsung. Given Samsung’s dominance of the Android platform it was going to be problematic for Google in the future. This deal now creates a solid competitor to Samsung. Lenovo is one of the very few Chinese companies that have created a global brand. There are a lot of fantastic Chinese companies that are big but are unknown outside of China. So, with the Lenovo angle, Google gets a strong competitor to Samsung and also a partner to compete within the Chinese market (companies like Xiaomi which are non-Google Android). 3. The mobile market is like the PC market circa 2004, that is it is maturing and has a few years before brutal competition is going to drive down all profits. The future is connected devices, robotics and other ‘intelligent’ machines. With the Nest and Boston Dynamics purchase, Google has the team and the chance to build the next great hardware/software stack ground up and be well positioned for the big markets in the next decade. All in all, good set of moves for Google. Alas, Apple in contrast reminds me of Microsoft in the early ‘00s. Hugely profitable but fixated on the current ‘ecosystem’ and extending and controlling it. Microsoft’s fixation on the windows ecosystem proved to a huge distraction and ultimately made them miss the internet/advertising and the mobile markets both which proved to be gigantic compared to the windows franchise.
- newleaf 13y ago
  There could be an additional benefit to Google of having an Android maker that is also strong in the enterprise world (complementing Samsung's consumer strength).
- 10feet 13y ago
  > Contrary to gloating from Apple fans This isn't necessary, and cheapens a good point. > This deal now creates a solid competitor to Samsung. Samsung has solid competitors with strong global brands. You have Sony, which has been around for a long time. You also have LG, HTC, and a lot of other lesser known brands. You have Amazon, BN in the Tablet space. Not sure what the cheap shots at Apple and Apple fans have to do with this discussion.
deleted 13y ago
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huxley 13y ago
Would Google be able to keep the tax benefit of Motorola's losses for 5 more years after they sell Motorola off? "[Robert Willens, a New York accounting and tax expert] estimated that through the acquisition, Google can expect to reap $700 million a year in tax deductions from future profits each year through 2019." source: http://www.reuters.com/article/2011/08/31/us-motorolamobility-google-tax-idUSTRE77U1QX20110831 http://www.reuters.com/article/2011/08/31/us-motorolamobilit...
gtirloni 13y ago
I remember the day after the acquision of Motorola Mobility was announced. Some people showed up with any Google-branded merchandise they had at home (tshirts, mugs, etc). Everybody very happy and hopeful about the future. Six months later, apathy had dominated, people were leaving on their own, the office floor I worked at had only 2-3 people, from the previous 70-100. It's good to see it being sold to a company that demonstrated it can revive operations where the previous owner didn't care much (IBM with its PC division, and Google that only wanted the patents).
saturdaysaint 13y ago
I wonder how much connection there is to new reports of Google strong-arming Samsung into scaling back their UI "improvements" to stock Android (by threatening to not allow the Play suite on their devices). Perhaps the timing is coincidental, but it sends the signal that instead of trying to inspire device makers with a good competitor, Google figures that Android is dominant enough and their Play services are essential enough that they can dictate a uniform Android experience.
alexeisadeski3 13y ago
So let's get this straight: -Moto made decentish Android phones in China. -Moto is bought by Google. Transforms into arguably the best high end phone mfgr in the world, with handsets assembled in USA. Moto is forging ahead with some truly innovative features on their phones, whilst maintaining the core Google experience. They are the only mfgr to do this. -Moto is bought by a Chinese company. Sooooo... what's next? I hope than Lenovo can keep the most exciting mfgr going the right direction.
- ZeroGravitas 13y ago
  Lenovo already does laptop and desktop assembly in the USA, very similar to Motorola.
  - scott_karana 13y ago
    They do? All the laptops and desktops that passed through our shop were originally shipping from Shenzen (or nearby), but then again I'm in the Canadian market. Is it possible that the "assembly" in the US is just nominal?
    - ZeroGravitas 13y ago
      I think the assembly in the US is nominal for both Motorola and Lenovo to roughly the same degree. They extended their North Carolina location to do manufacturing/assembly at the start of last year: http://news.lenovo.com/article_display.cfm?article_id=1691 http://news.lenovo.com/article_display.cfm?article_id=1691
- snaky 13y ago
  >I hope than Lenovo can keep the most exciting mfgr going the right direction Look at Thinkpad.
pasbesoin 13y ago
It was nice while it (briefly) lasted. RIP Moto line et al.
blinkingled 13y ago
Lot of people are fixated on just the financials of the deal while ignoring the alternatives. Remember back before Google buying them, Motorola was doing even worse than they do today. In addition, CEO Sanjay Jha was talking about suing other Android OEMs for patents. If Microsoft / Rockstar type arrangement would've ended up bidding for Moto's patent portfolio and optionally phone lineup OR if another Android OEM had bought them outright - it would be a far worse outcome for Google. In the worst case there would be one less Android OEM and yet another patent abusing entity for other Android OEMs to worry. In the best case Moto's patents would be held by single Android OEM without any incentive for them to license those to other OEMs, leaving yet another hole in the patent situation. So strategically Google came out better off at the expense or 2/3Bn USD. They get to keep the patents, license them as needed, Moto brand continues to exist, Google keeps the Moto R&D group and it levels out the Android OEM market further buy strengthening a player such as Lenovo with their wider market reach. And while they were owning Moto, I think they improved the company by making them focus on smaller number of higher quality/unlocked/up to date phones at an affordable price and distinguishing features.
dujiulun2006 13y ago
春节快乐！ Today is the day before spring festival in China. Good timing, Lenovo.
xioxox 13y ago
I'm looking forward to a Motorola phone with an SD card slot. Maybe without Google pushing cloud storage we can finally store our own files.
seouljah760 13y ago
Are you freaking kidding me? Why the hell would Google sell one of Americas most trusted electronics brands over to the Chinese. It doesn't make any sense. Lenovo is one of the Chinese governments puppet companies (along with Huawei and ZTE) that uses it's products to spy on everyone it caters to. Anything Cyber related coming from China should be not be purchased, not because it's "Un-American", or "we are losing jobs overseas", but because it is a serious breach of privacy. Way to go Google, you have just helped the Chinese perpetuate ways to commit espionage against the Western world. "Do no evil" huh?

229 points by palebluedot 13y ago

"Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem." Well that settles that question at least.

Oculus 13y ago

Google lost about ~$9 billion on Motorola (~$12 Billion acquisition and now a ~$3 billion sale). This happened in the span of 2 years. You could throw $100 over your shoulder every second for those two years and that still wouldn't amount to $9 billion. We're the patents really worth that much? Edit: To anyone who uses the recent news about Google being forced to pay a percentage of their AdWords revenue to a patent troll: couldn't you spend $9 billion on lobbying to end this whole disaster of a patent system forever?

loxs 13y ago
What happened is not exactly that: https://news.ycombinator.com/item?id=7147251 https://news.ycombinator.com/item?id=7147251
psbp 13y ago
$12 billion - $3 billion - ~$2 billion (motorola home) - $3 billion motorola cash - whatever tax incentives over the period of ownership. They made it out ok.
palebluedot 13y ago
That's not really true, though. Motorola Mobility had ~$3B in cash at the acquisition point, and Google immediately sold off the cable box unit to Arris for $2.35B. Add in the ~$3B from this sale, and we are now at a cost of ~$4B. And I believe there were several tax advantages for Google, so it wouldn't surprise me if this whole acquisition only cost around $1B or so (and they keep the patents).
- Oculus 13y ago
  Ok, not as bad as I originally calculated. If that money went to lobbying though, it'd be fair to argue that they'd be closer to solving the fundamental issues there are in patent laws vs. acquiring a portfolio of patents that are only a temp. fix.
  - aragot 13y ago
    Is there any study that shows the cost of lobbying (in the case of moving major ideas like patents)?
    - dublinben 13y ago
      Only after the fact. Successful lobbying has a very high return on investment, but it's also pretty risky.
  - 51Cards 13y ago
    Sadly one has to bring a gun to a duel, because if you are going to wait for gun lobbying to stop your duel, you're probably going to get shot in the meantime. Not that lobbying isn't good in the long run, but you still need protection right now.
shimon_e 13y ago
> At $12.5B, Motorola is Google’s largest acquisition to date. Google paid $40 / share in cash, but received ~$11 / share in cash and $8 / share in deferred tax assets. Thus the value ascribed to operations + patents was about $21 / share, or $6.3B, reflecting a multiple of ~0.5x sales and 12x EBITDA. Now adjusting this further for the $2.35B total consideration Google is expected to receive for the Motorola Home business, we get a purchase price of just under $4B for Motorola's handset business and patent portfolio (17K patents and 7.5K patent applications). http://www.zdnet.com/googles-motorola-purchase-was-it-worth-it-7000009356/ http://www.zdnet.com/googles-motorola-purchase-was-it-worth-...
DannyBee 13y ago
" couldn't you spend $9 billion on lobbying to end this whole disaster of a patent system forever?" No. It wouldn't even help. Can folks please get over the idea that just throwing X dollars into lobbying somehow will magically get them what they want from congress. Especially not when you have other tech giants on the other side.
- Oculus 13y ago
  Are there really tech giants that are totally ok with our current patent system? I was under the impression that no company was happy, just some (e.g. Intellectual Ventures backers) are making due with what they can.
  - sangnoir 13y ago
    Yes- those with large patent pools. IBM and Microsoft, chief amongst them.

cdooh 13y ago

Patents are messing up valuations of these companies...

UncleChis 13y ago

May be they need money for the Nest deal (just kidding). Very strange to think of the recent Nest acquisition and this sale! Someone opens my eyes please!

nuclear_eclipse 13y ago
I was really hoping they'd be using the Nest acquisition to get some more hardware design talent on the Motorola team, but now I'm just baffled...
dclara 13y ago
To my understanding, Google will devote their energy to the new market, such as robot and home automation, plus Glass and self-driving car, which is already enough to deal with for a software company. No need to compete in the smart phone market with lower margin any more. Focus is very critical to a company's success and sustaining in business.
shliachtx 13y ago
It seems that Google isn't interested in being just another hardware/phone manufacturer. They want to make revlutionary and unique products. So they sold Motorola, but kept the R&D division. The same goes for why they bought Nest, are investing Google Glass, etc. - they want to be on the next frontier. Plus, they just built a great Android partner/manufacturer that will (if Lenovo is smart) continue to promote [near] pure Android and the Android ecosystem.

pearjuice 13y ago

>Lenovo intends to keep Motorola’s distinct brand identity--just as they did when they acquired ThinkPad from IBM in 2005. Are you fucking kidding me, Google? I don't know if you guys noticed but Lenovo completely ruined the ThinkPad brand into some average consumerist brand for their own good. They even went full-house when their Edge series lifted on the successful ThinkPad brand but was nothing more than that, a laptop with a name it couldn't live up to. I fear the same to happen with Motorola Mobility. With the Moto G the entire smartphone market was completely disrupted because Google showed pathetic Android consumerist brands how good a low-budget phone can be; sometimes it performed even better than the more expensive "high-end" varieties. If the rumors are true and Google will also abandon the hand-tailored Nexus line-up in favor of bidding-wars for Google Play edition phones of the same consumerist brands, it's finally over. When the Moto G was announced I had the same buzzy, warm, tingling feeling when Google started shipping the Nexus One. Now, I am realizing these will soon be vague memories to an era where smartphone users got value for their money.

chris_mahan 13y ago
They divested a business they couldn't profit from. I say good for them. What Lenovo does going forward is not entirely clear. On Google not selling devices anymore: the Chinese manufacturers have won, and they will flood the US market with great, inexpensive devices. They are going after the great unwashed masses who want smart phones, all over the world. Billions of them. Only they can supply the phones, so Google wisely exits the race, and will stick to what it knows best: software.

pavlov 13y ago

Next year, Microsoft will buy Lenovo for $22 billion. It will nicely round out Microsoft's already expansive Xbox+Surface+Lumia hardware division with a full range of PCs and x86 servers. Perhaps more pressingly, the deal will also ensure that the only growing PC maker stays in Microsoft's camp and abandons its flirtations with Android... The last remains of Motorola Mobility will be dissolved into the MS division that was formerly Nokia Mobile Devices, completing a surreal cycle of acquisitions.

buster 13y ago
I think you can be pretty sure that no company will buy Lenovo. Not only because it's big and expensive but because it's a chinese company. It's one of chinas gateways into the western market. The government won't let someone buy Lenovo, for sure. If someone buys a company it will be Lenovo, increasing its portfolio and pushing into US and european markets.
- o0-0o 13y ago
  Chinese companies are not off limits for purchase. They just need to mature a bit, become more sophisticated, and distance themselves from their repressive government. After that, the suitors will come.
  - buster 13y ago
    How much more mature should a company become that owns IBMs hardware business and one of the oldest and the most renowned mobile companys. How much more mature as "largest telecommunications equipment maker in the world" (which is Huawei)? A US company will never buy such a company. What happened in the past was them creating Joint Ventures with western companys or buying them straight away to get into other markets. It's just too much of chinas next step after manufacturing the low cost goods of the world, to create the high-tech as well. And of course to sell it to you and me. And that's politics as much as economics.
  - toyg 13y ago
    Even if you were right, this will not happen in a couple of years. It certainly won't happen on the watch of current Chinese leadership, their plan to "move up" in the production chain being quite clear and well-known.

lispsil 13y ago

Damnit, I used plenty of moto G's for android development they were great mainly because you could actually buy unlike Nexus constant shortages. Lenovo like most Chinese corps not friendly to open source I imagine they will replace fastboot with some crippled proprietary junk, and be unfriendly to kernel mods

Mikeb85 13y ago
Really? Thinkpads are the most recommended laptops for running Linux. When I ordered mine, Lenovo even gave me a discount when I told them I didn't want Windows and wanted to run Linux. They even have certified some of their products for Linux... Not sure where you get your info.
- lispsil 13y ago
  Inexpensive mobile market in China is 90% closed source or reluctant open source where they give you something thats almost entirely blobs to barely satisfy GPL. https://productforums.google.com/forum/m/#!topic/mobile/KnEnIGdi5mo https://productforums.google.com/forum/m/#!topic/mobile/KnEn... Most are squeezing all they can out of the MTK chipset and don't want their competition to know their mods. I'm betting they will flood US market with $80 MTK phones under the motorola brand
  - deleted 13y ago
    [deleted]
    - shimon_e 13y ago
      Yeah they do. Heck even the Yoga 8 uses MTK. http://en.wikipedia.org/wiki/Lenovo_A750 http://en.wikipedia.org/wiki/Lenovo_A750
      - deleted 13y ago
        [deleted]
    - 13y ago

dudus 13y ago

This comment on the post summarizes well >> Nicolas Charbonnier Moto total cost $12.5B to Goog in 2011: - $3.2B Moto's 2011 cash - $2.4B Moto's 2011 deferred tax assets - $2.35B Moto's Set-top-box business sold in 2012 - $75M Moto's factories business sold in 2013 (incl 7K factory employees) - $2.91B Moto's Mobility business sold in 2014 Thus Moto's remaining assets including patents, buildings (in Chicago and elsewhere), probably a good part of the 12K employees cost Goog $1.56B Doing that, Goog may have well protected and guided the Android ecosystem along in the past couple years.

kyrra 13y ago
I thought the Chicago (technically the Schaumburg office I believe) moto office was part of the Mobility group? Google is retaining those people?
- pavanred 13y ago
  Motorola Mobility office is in Libertyville and they are currently moving some employees to an office in downtown Chicago.
- budu3 13y ago
  You're confusing Motorola Solutions headquartered in Schaumburg and Motorola Mobility headquartered in Libertyville.
graving 13y ago
Those numbers don't include Motorola's increasing losses under Google. http://static1.businessinsider.com/image/52605103ecad0479335c44d0-960/chart-of-the-day-motorola-losses.jpg http://static1.businessinsider.com/image/52605103ecad0479335... The loss for the latest quarter will be announced tomorrow.
dclara 13y ago
This looks more clear. They pretty much got everything back except the tax liability payment plus the valuable patents remained. Not a bad deal. And I think it's a positive move to put the hardware design and manufacturing back to the hardware company to compete in that market sector. The only sad thing is Android's future.

ChuckMcM 13y ago

Interesting, Google really really really doesn't want to be in the physical goods business, and yet they are buying robot companies. This is the first time I believe a large 'service' company is struggling with businesses in the "goods" side of the economy, we have seen many companies like IBM who started out all 'goods' and have been moving into all 'services'. Pretty good win for China as well.

bliti 13y ago
Robotics is currently more about software (CV, ML, etc) than hardware. Mechanical engineers can really build one hell of a robot, electrical engineers can wire it beautifully, computer engineers can create an awesome processor for it, but software engineers are still catching up. That is where Google seems to be taking interest. Once machines are able to "see" and recognize the outside world then learning about it is simply more of a time constraint than anything.
patrickaljord 13y ago
Not sure if you read the article but it says: "But the smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices. It’s why we believe that Motorola will be better served by Lenovo. (...) As a side note, this does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry. We’re excited by the opportunities to build amazing new products for users within these emerging ecosystems." I read it like this: "smartphones are turning into commodities and though they are not as commoditized as PCs yet they're on their way, Lenovo is good at selling commoditized low margin computers already. We're focusing on wearable and robots where the potential for growth is much stronger for us." Just a wild guess.
dclara 13y ago
Don't quite agree with you on that they don't want to be in goods business. They just bought Nest. It depends on Google's overall strategy to occupy the future market. Smart phone will have less margin and too much competitions. But I agree that either way will not generate good results. Companies have to keep moving anyways.

shmerl 13y ago

I worry about patents. Can Google ensure they will never be used for aggression prior to selling it?

timv 13y ago
They're not selling the patents.
- michaelcampbell 13y ago
  I believe they're not selling ALL the patents.

mrich 13y ago

Google is happy to strengthen another Android OEM to balance out the ecosystem, keeping Samsung from dominating. They focus on the software which is their strength. I'm curious whether they have some clause to keep Lenovo from dropping Android in the next x years. Sounds like a bad deal at first, but considering this and looking at the numbers it's a good move for both companies.

thethimble 13y ago
Even without the clause I doubt Lenovo would choose to drop Android. With the Moto X/G, Motorola has strong momentum as an Android handset manufacturer. This includes consumer expectations that it will continue to make Android devices. Since Lenovo has no desire to (and is too late to) start a forked Android ecosystem a la Amazon/other Chinese manufacturers, sticking with Android makes the most logical sense.

rebelidealist 13y ago

Loving the G+ comments for Larry Page about the Motorola sale. Internet honesty at it's finest. https://plus.google.com/+LarryPage/posts/5D1jYPmdNTc https://plus.google.com/+LarryPage/posts/5D1jYPmdNTc Interesting to see what happens when the CEO is talking directly with the public on a social network.

ulfw 13y ago

With the sale of Motorola, the intro of Chrome Apps for Mobile, the stepping down of Andy Rubin - is Google losing interest in Android? When will we see ChromeOS for Mobile?

npalli 13y ago

Interesting set of moves by Google. Few observations 1. A lot of people are fixated on the sales prices and the $9.5 Billion “loss”. Contrary to gloating from Apple fans, looks like in the final analysis Google paid about $3 Billion for “majority” of the Motorola Patents. Not a terrible deal. 2. Apart from the patents, one reason for the Motorola purchase was to provide some competition to Samsung. Given Samsung’s dominance of the Android platform it was going to be problematic for Google in the future. This deal now creates a solid competitor to Samsung. Lenovo is one of the very few Chinese companies that have created a global brand. There are a lot of fantastic Chinese companies that are big but are unknown outside of China. So, with the Lenovo angle, Google gets a strong competitor to Samsung and also a partner to compete within the Chinese market (companies like Xiaomi which are non-Google Android). 3. The mobile market is like the PC market circa 2004, that is it is maturing and has a few years before brutal competition is going to drive down all profits. The future is connected devices, robotics and other ‘intelligent’ machines. With the Nest and Boston Dynamics purchase, Google has the team and the chance to build the next great hardware/software stack ground up and be well positioned for the big markets in the next decade. All in all, good set of moves for Google. Alas, Apple in contrast reminds me of Microsoft in the early ‘00s. Hugely profitable but fixated on the current ‘ecosystem’ and extending and controlling it. Microsoft’s fixation on the windows ecosystem proved to a huge distraction and ultimately made them miss the internet/advertising and the mobile markets both which proved to be gigantic compared to the windows franchise.

newleaf 13y ago
There could be an additional benefit to Google of having an Android maker that is also strong in the enterprise world (complementing Samsung's consumer strength).
10feet 13y ago
> Contrary to gloating from Apple fans This isn't necessary, and cheapens a good point. > This deal now creates a solid competitor to Samsung. Samsung has solid competitors with strong global brands. You have Sony, which has been around for a long time. You also have LG, HTC, and a lot of other lesser known brands. You have Amazon, BN in the Tablet space. Not sure what the cheap shots at Apple and Apple fans have to do with this discussion.

deleted 13y ago

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huxley 13y ago

Would Google be able to keep the tax benefit of Motorola's losses for 5 more years after they sell Motorola off? "[Robert Willens, a New York accounting and tax expert] estimated that through the acquisition, Google can expect to reap $700 million a year in tax deductions from future profits each year through 2019." source: http://www.reuters.com/article/2011/08/31/us-motorolamobility-google-tax-idUSTRE77U1QX20110831 http://www.reuters.com/article/2011/08/31/us-motorolamobilit...

gtirloni 13y ago

I remember the day after the acquision of Motorola Mobility was announced. Some people showed up with any Google-branded merchandise they had at home (tshirts, mugs, etc). Everybody very happy and hopeful about the future. Six months later, apathy had dominated, people were leaving on their own, the office floor I worked at had only 2-3 people, from the previous 70-100. It's good to see it being sold to a company that demonstrated it can revive operations where the previous owner didn't care much (IBM with its PC division, and Google that only wanted the patents).

saturdaysaint 13y ago

I wonder how much connection there is to new reports of Google strong-arming Samsung into scaling back their UI "improvements" to stock Android (by threatening to not allow the Play suite on their devices). Perhaps the timing is coincidental, but it sends the signal that instead of trying to inspire device makers with a good competitor, Google figures that Android is dominant enough and their Play services are essential enough that they can dictate a uniform Android experience.

alexeisadeski3 13y ago

So let's get this straight: -Moto made decentish Android phones in China. -Moto is bought by Google. Transforms into arguably the best high end phone mfgr in the world, with handsets assembled in USA. Moto is forging ahead with some truly innovative features on their phones, whilst maintaining the core Google experience. They are the only mfgr to do this. -Moto is bought by a Chinese company. Sooooo... what's next? I hope than Lenovo can keep the most exciting mfgr going the right direction.

ZeroGravitas 13y ago
Lenovo already does laptop and desktop assembly in the USA, very similar to Motorola.
- scott_karana 13y ago
  They do? All the laptops and desktops that passed through our shop were originally shipping from Shenzen (or nearby), but then again I'm in the Canadian market. Is it possible that the "assembly" in the US is just nominal?
  - ZeroGravitas 13y ago
    I think the assembly in the US is nominal for both Motorola and Lenovo to roughly the same degree. They extended their North Carolina location to do manufacturing/assembly at the start of last year: http://news.lenovo.com/article_display.cfm?article_id=1691 http://news.lenovo.com/article_display.cfm?article_id=1691
snaky 13y ago
>I hope than Lenovo can keep the most exciting mfgr going the right direction Look at Thinkpad.

pasbesoin 13y ago

It was nice while it (briefly) lasted. RIP Moto line et al.

blinkingled 13y ago

Lot of people are fixated on just the financials of the deal while ignoring the alternatives. Remember back before Google buying them, Motorola was doing even worse than they do today. In addition, CEO Sanjay Jha was talking about suing other Android OEMs for patents. If Microsoft / Rockstar type arrangement would've ended up bidding for Moto's patent portfolio and optionally phone lineup OR if another Android OEM had bought them outright - it would be a far worse outcome for Google. In the worst case there would be one less Android OEM and yet another patent abusing entity for other Android OEMs to worry. In the best case Moto's patents would be held by single Android OEM without any incentive for them to license those to other OEMs, leaving yet another hole in the patent situation. So strategically Google came out better off at the expense or 2/3Bn USD. They get to keep the patents, license them as needed, Moto brand continues to exist, Google keeps the Moto R&D group and it levels out the Android OEM market further buy strengthening a player such as Lenovo with their wider market reach. And while they were owning Moto, I think they improved the company by making them focus on smaller number of higher quality/unlocked/up to date phones at an affordable price and distinguishing features.

dujiulun2006 13y ago

春节快乐！ Today is the day before spring festival in China. Good timing, Lenovo.

xioxox 13y ago

I'm looking forward to a Motorola phone with an SD card slot. Maybe without Google pushing cloud storage we can finally store our own files.

seouljah760 13y ago

Are you freaking kidding me? Why the hell would Google sell one of Americas most trusted electronics brands over to the Chinese. It doesn't make any sense. Lenovo is one of the Chinese governments puppet companies (along with Huawei and ZTE) that uses it's products to spy on everyone it caters to. Anything Cyber related coming from China should be not be purchased, not because it's "Un-American", or "we are losing jobs overseas", but because it is a serious breach of privacy. Way to go Google, you have just helped the Chinese perpetuate ways to commit espionage against the Western world. "Do no evil" huh?