Motorola Mobility is being sold to Lenovo, in a deal worth $2.91B. Google is divesting itself of the handset division it purchased for $12.5B in 2011, but it will keep some of the assets — including patents.
“Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures,” says Motorola Mobility CEO Dennis Woodside. “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.”
When Google purchased Motorola Mobility, much of the discussion swirled around whether it was buying it simply to own a hardware pipeline on which to deliver its Android juice — or whether it wanted patents for protection. The answer, as is typical, lay somewhere in the middle. Though the Motorola patents never turned out to by incredibly effective winning solo battles against Google’s patent enemies, they did work as a part of a larger tactic which has seen Google aligning itself via cross-licensing with OEMs like Samsung.
One segment of the statement today by Woodside was interesting:
Since being acquired by Google in 2012, Motorola has transformed itself, focusing on solving real consumer problems and providing amazing experiences built on a foundation of pure Android. The result has been Moto X, Moto G, and a reinvigorated Droid line. Together, these devices have won over consumers and critics alike and helped re-establish the Motorola brand around the world.
Indeed, Google’s purchase and investments in Motorola did raise the flagging manufacturer’s profile significantly over the intervening years. They have several well-received smartphones on the market and have made a lot of noise about technology innovations in wearable computing and DARPA-think-tank-director hires.
Google sold off several aspects of its initial Motorola purchase including its cable box business. And it managed to leverage the patents — which Google valued at $5.5B — to at least some positive outcome. So, while the monetary ‘wins’ or ‘losses’ here are one for the bean counters to figure out, the strategic victories for Google may actually be fairly strong. According to some maths from analyst Benedict Evans, Google’s total outlay may have been closer to $7.15B than $12B — the divestitures, retention of patents and the sale price would cut the plain monetary loss down further to under $2B.
There is now a renewed Android vendor on the market peddling Google’s OS, in the care of Lenovo, the logistics firm that made IBM’s old enterprise business the biggest consumer computer retailer in the world. And it has some new cross-licensing agreements on patents — the majority of which it gets to keep.
And, with the purchase of Nest, it has a fresh young hardware company with a design focus and a set of high-profile talent.
“As a side note, this does not signal a larger shift for our other hardware efforts,” noted Google CEO Larry Page in an announcement today. “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.”
It may look bad in the raw math, but may not turn out so bad for all parties when the pieces settle into place.
