In a strange twist, it has just been reported that Google is set to sell Motorola Mobility to Lenovo for a sum of 3 billion dollars. Google purchased Motorola in 2012 for a sum of 12.5 billion. From the surface, it seems like it’s a loss of 9.5 billion if the deal does go through, but there’s more to it. Lenovo has purchased patents and parts of IBM in the past, and have been linked with a bid for Blackberry among others as recently as last year. This news in particular comes as a major shock to us because Motorola was just turning things around with the Moto X, G and their wide variety of customizations.
“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere,” said Larry Page, CEO, Google.
Google said in a press statement that the purchase price is approximately US$2.91 billion (subject to certain adjustments), including US$1.41 billion paid at close, comprised of US$660 million in cash and US$750 million in Lenovo ordinary shares (subject to a share cap/floor). The remaining US$1.5 billion will be paid in the form of a three-year promissory note.
What about patents?
Motorola was always about patents and Google has confirmed that they will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio.
With all things considered, Google has been taking losses from Motorola since they purchased the handset makers; even after selling their set top business to Arris and receiving several tax breaks along the way. The patents that Motorola possess were unable to stand up against both Apple and Microsoft in court. The next few days or even hours will be very interesting and we will bring you the details as they are revealed to us. Although I am a bit saddened by the news, I still look forward to the impending arrival of my Moto G with open arms.