Lenovo acquires Motorola for 2.91 Billion USD: All that you need to know

When Google acquired Motorola for $ 12.5 Billion 19 months ago, many saw it as an aggressive move on behalf of Google while many saw it as a reckless move. As times progressed, things changed and Google didn’t really go all guns blazing in the handset business as it would have not been received well by its partners. Google has now sold off the handset business of Motorola to Lenovo for $ 2.91 Billion which comes across as a bargain for Lenovo and the same can’t be said for Google which seems to have taken a loss with it but won’t accept the same.

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As a part of the deal, Lenovo will be paying Google $1.41 Billion at the time of signing the deal. Out of these, $660 million will be paid in cash while $750 million will be paid in the form of Lenovo shares. The $1.5 billion that remain will be paid by Lenovo by a 3 year promissory note. Once Chinese and US authorities approve the deal, both the companies can get back to business. Now let us see what is there in the deal for everybody.

When Google acquired Motorola, it was looking towards a brighter future courtesy the patents it had in bag and it would help its partners with the law suits against them. But later in the day, it realised that the whole gamut of patents Motorola had turned out be worth way less than it had hoped to be. On top of it, it could not really give Motorola’s handset business a boost because that would have created a lot of problems to its handset partners because then Motorola would have had an unfair advantage over the rest.

So Google went pretty slow with launching Motorola devices and they could not revive the brand to an extent it once was. Amidst all this, Motorola has something good to look forward to. Seeing the fact that Google doesn’t own it any more, it can actually look to take advantage of Lenovo’s distribution network. But Motorola will lose out on the benefits it once enjoyed while being owned by Google such as getting regular updates.

The Research and Development department is still with Google and it will continue to work in the field of wearable technology and other related technologies. The winner of this deal is Lenovo which has got itself an amazing prospective handset business at a price it would love. Lenovo has got itself about 2,000 patents with the deal which will surely help it in future. Lenovo is amongst the top 5 smartphone vendors globally and acquisition of Motorola will surely give it the benefit of entering the smartphone arena with a lot more aggression.

And as far as the regular consumer is concerned, you’ll still be able to buy Motorola devices in future and Lenovo’s distribution and after sales network is wide enough for a good after sales support too. Do let us know in case you have any more questions regarding the same or if you’ve got to say something about it.

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  • Md Nizamuddin February 20, 2014 5:00 pm

    I have a simple question, as these all deals happening, google sell to lenovo the motorola patents,but my question is whether indian consumers will get the same after sale support from motorola after buying Moto G, If yes then how,because after purchasing a product every body needs good service as consumer products are bound to get defect after few times,so consumers are really worried about there products,so they visit company service centres where they can get good service from the company,but if the company is having so much ups and downs they how a consumer can rely on the products which is quite good in all aspects.In india there are service centres of Motorola which was being run by other company service providers,so how can a consumer get a good service,

  • Prithvi February 1, 2014 8:26 pm

    1) Moto X too was to be released post Moto G’s release as per news. Wonder what the fate of X is for Indian market. 2) How efficient and effective is Lenovo in delivering AFTER-SALES service?

  • Joy February 1, 2014 10:57 am

    RIP Motorola !!!

  • abhijith February 1, 2014 6:53 am

    google is brilliant they just selling handset business . . not selling motorola patents . . so its gain for google to make money without spending from their pockets . . what a business by google wow

    • Rama February 1, 2014 11:13 am

      @abhijit
      Yeah right selling the handset business for 3 billion $ which they acquired for 12 billion $ is a smart decision for you.Till now the patent portfolio of motorola has not been of much use to Google.Motorola was the only way by which Google could have some hardware presence but Google blew it.

      • Ganesh February 11, 2014 3:24 pm

        That’s not true. Google still has entire portfolio of Motorola’s patents. It’s more of a pre-emptive move. Infact Moto had successfully sued Apple in some countries and unsuccessfully in some. But with Moto’s patents, Apple will run with it’s tail between it’s legs.

        • Prithvi February 11, 2014 4:54 pm

          Ganesh is right. Moreover, Google has infact purchased 5.94% of Lenovo. Motorola as a handset manufacturer may benefit a lot more than you think from this takeover.

  • vsk January 31, 2014 5:53 pm

    Ha ha RIP to moto g

  • ROHAN SINGH January 31, 2014 4:21 pm

    I think its the Good Deal for Lenovo. Google selling Moto in India without after sales service and channel was difficult but this can be achieved by Lenovo. And Lenovo can sell these phones at more affordable rates since their origin is China. Google Gave up Moto but Nexus will always exist. Now Google will give pure android exp on Nexus devices only.

    • Rama January 31, 2014 4:50 pm

      @rohan
      According to the latest rumor google plan on discntinuing the nexus by 2015.Agreed that nexus devices provide stock android but not everyone can afford them.

      • Esmail January 31, 2014 7:35 pm

        I had read that too, Google planning to discontinue nexus series of mobiles and tablets by 2015 but they will be replaced by Google play edition of all popular flagship phones with pure android experience and direct updates from Google. These will be available online on play store and will give a wide choice of hardware and price point options with pure android experience.

      • Amit January 31, 2014 7:35 pm

        Budddy Nexus is priced very less when u compare it with HTC one, Galaxy S4, Nexus has same spec compared to Above phones but comes 7000-10000 less.

        Reason google is planning to drop nexus is bcos of its Play edition handsets. Play edition are manufactured by all OEMs & this inturn will offer users stock android exp without hurting OEM’s business.
        Google is trying to bring in level-plying field in Android. Nexus’s success has created a kind of rivelary between Samsung & google, It became very clear when Samsung held android event without inviting google & Forked versions of android are becoming major threat to google since they don’t come with Google’s services. Samsung, sony are the major OEM’s who are supporting Android/google & google wants them to be happy & supportive.

      • Rama January 31, 2014 10:10 pm

        @Amit and Esmail
        Agreed that Google would replace nexus devices by GPE devices.But still as far as I know almost all GPE devices except the moto g and moto x are above 500$.Now since motorola has been acquired by Lenovo I dont expect even moto devices to be cheap.The major impact of this would be on developers who depend on nexus devices almost every year for developing apps,roms and have a knack of the latest version of android.The nexus 5 or nexus 4 might not have the best display,design or even battery,But still one thing nexus devices don’t compromise on is the processor and ram which are top notch.For a developer its essentialy the processor and ram which matter the most and the stock version of android.Most developers are ready to compromise on stuffs like display,design etc as long as price is as low as 300$ in some cases for nexus devices.
        Spending as much as 500$ on GPE devices is going to be a major setback to developers if nexus devices were to be discontinued.As amit rightly pointed out nexus devices are being discontinued since Google does not want to upset its partners but by discontinuing nexus devices it would be upsetting almost the entire developer community.
        Nexus devices being discontinued is an example of how Google can be bullied for not having a hardware presence in the market.Google should have continued with motorola and gain some presence in the hardware market.With motorola being sold away at throw away prices Google virtually has no control over hardware.It would have to continue to depend on Samsung,Sony etc to support android.Samsung and Sony know this and would continue to bully google just like how they must have said it indirectly to stop the nexus line.Anyways lets see what happens in future and btw all this is just a speculation

  • Rama January 31, 2014 3:59 pm

    According to me Google should not have sold motorola.I guess moto g may not make it to India at those ultra cheap prices.Google being a software company could bare the loss of manufacturing and selling moto g at a negative margin but I don’t expect Lenovo to do the same as they are a hardware company.Motorola was the only way by which Google could have effectively stopped the rise of windows phone.Moto g at 12k would have been a bargain for many and people planning to buy a lumia 525 or a lumia 620 would have reconsidered their choice despite the after sales service of motorola.Motorola was the only way by which Google could have taken some control over hardware as well.Companies like Samsung hardly promote Android and Google apps rather they have made a duplicate copy of almost every android app and plan on dumping android for tizen in the long term.Even if Samsung fails,a new one like Samsung would rise,Google is now always going to be bound by insecurity regading Android and its various apps as once a manufacturer has a large market share of android.They slowly would want to take control of software as well.Lastly buying moto for 12.5 billion $ and selling it partially for 3 billion $.

  • rahul barik January 31, 2014 2:11 pm

    the future of moto g and speedy updates are now in dark

  • Yogesh Sarvade January 31, 2014 1:53 pm

    @Ritij sir,thank you so much for this really important article.It seems that you read my last comment and gave all required details.I just want to know now that whether moto g will be launch in India now ? As already they delayed the launch for 3 months since nov. And even if it launch will it get the updates of android Kitkat?

    • Ritij Khurana January 31, 2014 3:36 pm

      The Moto G launch will be there as per schedule and it would either come with Android KitKat out of the box or get one soon after the launch. It will get the Kitkat update for sure.

      • Yogesh Sarvade January 31, 2014 3:53 pm

        @ ritij sir thank you. Keep good work.

  • Yogesh Sarvade January 31, 2014 1:51 pm

    @ Ritij sir ,thank you so much for this really important article. It seems that you read my last comment and gave all required details. I just want to know now that whether moto g will be launch in India now ? As already they delayed the launch for 3 months since nov. And even if it launch will it get the updates of android Kitkat?