Google has officially agreed to sell off the recently acquired Motorola Mobility to Lenovo for a sum of $2.91 billion. The deal will sum of to $660 million cash, $750 million of ordinary Lenovo shares, and a three-year promissory note worth $1.5 billion.Larry Page explained why Google decided to makes this deal, saying that Google couldn't be "all-in" when it came to making handsets, and that is what is needed to be successful. Page says that Lenovo's experience will better serve Motorola, and it will allow Google to focus its efforts specifically on Android.
However Page does say that "Lenovo intends to keep Motorola’s distinct brand identity", which is good news for long time Moto fans. Additionally he stated that "Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem." This means that Lenovo will not be getting its hand on the 17,000 patents that are considered the main reason for Google's acquisition of the US manufacturer in the first place.
We have witnessed some great products and services from Motorola under Google's leadership, like the Motorola Moto X, Motorola Moto G, the Moto Maker device customization and Project Ara. Unfortunately consumer response has been low and devices haven't sold that well. It was always assumed that Google's main aim was Motorola's patent portfolio, and Google was never expected to have much interest in the devices division of the company. Google has since kept Motorola separate from the main Google business ever since acquiring it, although it is being run by ex-Googler Dennis Woodside.
As far as Project Ara, Motorola's modular phone initiative, that is not part of this deal and will be staying with Google's Android team.On a conference call with reporters, Lenovo said that the deal only includes Motorola's devices division, and not the Advanced Technology and Projects group. The Advanced Technology and Projects group is about 100 people strong and led by former DARPA director Regina Dugan, and is the group directly responsible for Project Ara, security tattoos, and biotech sensors. Reportedly, the plan is for Google to scale Project Ara with the full backing of Google's own resources, which should prove to accelerate the project quite a bit.
Lenovo is one of the largest handset manufacturers in China, but it has struggled to gain market share in the U.S., and this deal would certainly change that. Lenovo has been promising to make its push into the U.S. market by 2015. It was rumored to have been one of the companies bidding for BlackBerry last year, but that move was blocked by the Canadian government. Motorola would make for a much better acquisition, and a major shift in power for Lenovo, as the company is quite experienced with such deals. Back in 2005, Lenovo bought off IBM's ThinkPad laptop division, essentially paving its way to the top -- Lenovo is now the world's biggest PC maker. Should the Chinese company manage to leverage Motorola's brand name as well, it wouldn't be at all surprising to indeed see the company launch a serious challenge to incumbents in the US and Europe
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