It’s official: Google is out of the handset business. And this is actually a very good deal for both Google and Lenovo.
Google has now officially announced that they are selling the Motorola brand and the Motorola Mobility business to Lenovo, who, of course, are a major manufacturer already in handsets but perhaps best known for acquiring IBM’s PC business in 2005. Lenovo is a respected brand in the market, and, as a manufacturing-oriented Asian company, is well-suited to the low-margin, rough-and-tumble world of handsets. Google gets to keep the “vast majority” of the Motorola patent portfolio, so, despite the fact that Google originally paid around US$12B and the sale is for around US$3B, this looks like a good deal for both parties.
Why, in Google’s case? Because of all those patents, which may yet be worth billions, and because Google is no longer competing with its OEMs in the Android space. This new reality may very well derail Samsung’s Tizen efforts, although I don’t think such is necessarily so as Tizen still presents a potentially valuable direction for Web/Cloud-based applications overall. Google might even embrace Tizen over time. Regardless, Android is absolutely in a better competitive position now, not that it needed a whole lot of help in either reaching or now remaining a solid Number One in mobile operating systems. And I’m assuming that Google will also continue to plow forward with tablets, glasses, and other assorted hardware innovations and businesses as well. We also may not have seen the last of Google in handsets, but it’s hard to imagine them ever being a major player here. Still, there’s big PR value in even limited-production but novel devices.
So – this is a classic win/win. I’m just wondering why Google took so long to get a deal like this done. Think of the billions they could have saved had they moved more quickly. Then again, what does Google care about a mere billion or nine?
Congratulations to both parties. I’m expecting interesting new handsets from Motorola, and an even more innovative and aggressive Android presence in the market going forward.
