Google announced this afternoon that it is selling its Motorola division to Lenovo for $2.91 billion — less than two years after acquiring the smartphone maker for $12.5 billion.
In a blog post, Google CEO Larry Page gave credit to the Motorola team for “reinventing the company,” but also noted that “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 — which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world,” Page wrote.
As part of the deal, Google will retain a majority of Motorola’s patents, “which we will continue to use to defend the entire Android ecosystem,” Page wrote. Lenovo will have access to 2,000 patents.
— Google (@google) January 29, 2014
Google announced the deal to buy Motorola Mobility for $12.5 billion in August 2011, and completed the acquisition in May 2012, gaining control of Motorola’s patents and helping bolster its mobile business. However, that acquisition — Google’s largest to date — hasn’t provided the strategic fit that Google had hoped. In late 2012, Google sold Motorola’s cable box division for $2.35 billion.
This is Lenovo’s second significant acquisition this month. The Chinese company swooped up IBM’s low-end server business for $2.3 billion last week. Lenovo also bought ThinkPad from IBM in 2005.
We’ve just signed an agreement to sell Motorola to Lenovo for $2.91 billion. As this is an important move for Android users everywhere, I wanted to explain why in detail.
We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users. Over the past 19 months, Dennis Woodside and the Motorola team have done a tremendous job reinventing the company. They’ve focused on building a smaller number of great (and great value) smartphones that consumers love. Both the Moto G and the Moto X are doing really well, and I’m very excited about the smartphone lineup for 2014. And on the intellectual property side, Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners.
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—which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere. 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.
Lenovo has the expertise and track record to scale Motorola into a major player within the Android ecosystem. They have a lot of experience in hardware, and they have global reach. In addition, Lenovo intends to keep Motorola’s distinct brand identity—just as they did when they acquired ThinkPad from IBM in 2005. Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem.
The deal has yet to be approved in the U.S. or China, and this usually takes time. So until then, it’s business as usual. I’m phenomenally impressed with everything the Motorola team has achieved and confident that with Lenovo as a partner, Motorola will build more and more great products for people everywhere.