Lenovo signed an agreement to acquire Motorola for $2.91 billion from Google, which is selling it at a massive loss after buying Motorola for $12.5 billion less than two years ago. So what does this deal mean for all the three companies involved?
For Google
- At $12.5 billion Motorola’s acquisition was an expensive mistake for Google. Google had hoped that Motorola’s patents would save it and its Android hardware partners, who were taken to the courts for patent infringement by companies of Nokia, Microsoft and Apple. But, this all end with a blow as most of the patent google acquires were standard patents. Through which google could not save itself.
- Google at that time was mainly interested in the company's patent portfolio. Now, Google is selling its subsidiary handset business, which has been losing hundreds of millions each quarter since the purchase.
- Google will hold on to Motorola's R&D department headed by former DARPA Director, Regina Dugan. That department was working on future products including smart tattoos, smart pills and even a modular phone codenamed Ara.
- It will also ensure that maor android OEM's don't shift to alternative OS like samsung with windows or Tizen
For Motorola
- The deal is a mixed bag for Motorola. It would no longer have a "a google company" mark with it. Motorola is most likely to lose all the Googleness under Lenovo.
- On a positive note, Motorola will finally be able to scale up with Lenovo. The Chinese electronics giant already has a global sales and distribution network. On the smartphone side, it has a thriving business in China, India and Indonesia – some of the largest and fastest growing smartphone markets in the world.
- Nothing going to change much for motorola as motorola brand will not be discontinued
For Lenovo
- The company that gains the most in this deal is Lenovo which at $2.91 billion is a bargain. Even the terms – about $660 million in cash and $750 million in shares at the time of closing the deal and the remaining $1.5 billion spread over three years.
- Apart from the financial aspect, Lenovo also gets a great engineering team as well as license to Motorola’s patents that Google would retain and 2,000 patents it will receive. It will also get to keep the trademark and copyright for the Motorola brand name.
- Acquiring Motorola will also give Lenovo access into the US and Latin American markets, where it does not have a strong smartphone presence at the moment. The deal could catapult Lenovo as the third largest smartphone vendor after Samsung and Apple, overtaking Huawei and LG.
- Its all depend on lenovo how it use Motorola’s relationships with carriers its manufacturing plants and its patents.
Will You still Buy motorola products after the acquisition ? Let us know what to feel about this deal in comment below?
Source: +BGR
