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Buying Motorola From Google: What Does it Mean?


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By Marcus YamJanuary 29, 2014 3:12 PM

Lenovo looks to go up against Samsung for the lion's share of the Android smartphone market.

Lenovo has announced a $2.91 billion deal to acquire Motorola Mobility from Google. Motorola's handset business was sold to Google in 2012 for $12.5 billion, but hasn't made any money for the search giant.

Google said that it purchased Motorola Mobility for its patents, most of which aren't included in the sale to Lenovo. Instead, Lenovo will receive a license to the portfolio of patents and other intellectual property. On the surface, Lenovo getting Motorola for less than a quarter of what Google paid for it sounds like a steal (after all, are those patents really worth $9 billion?), but this Chinese company is after more than just a bargain. Lenovo is plotting world domination at least in terms of computers and electronics. Less than a week ago, Lenovo acquired IBM's x86 server business.

Lenovo's new product onslaught at CES 2014 demonstrated that the company wants to leave no market segment untouched. Smartphones is still an area that the company is just dabbling in, and only in limited markets. We saw a handful of Lenovo smartphones running Android at CES, but none of them were position for the North American market.

Yang Yuanqing, chairman and CEO of Lenovo, said that the company would be making a big push into the US and western European markets in 2015. With Samsung virtually uncontested in the Android market, Lenovo sees an opportunity here to steal a piece of the pie, especially in the western markets where consumers see the phone choices simply as "iPhone" or "Galaxy."

The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space, said Yang Yuanqing in a prepared statement.

This sale dashes any hopes of there being a true Google-made phone from Mountain View. While Nexus devices are a collaboration between hardware partners such as Samsung and LG, with Google providing the software support, the sale of Motorola Mobility to Lenovo means that we'll probably never see a phone that's designed top to bottom by Google.

This could also mean an end to devices like the Moto X and Moto G, which weren't quite Nexus devices, but shared a lot of design philosophy in creating a pure Google experience. Moto X and Moto G owners enjoyed a near-stock build of Android, which meant timely updates to the latest updates of the mobile operating system.

With Motorola Mobility in its stables, Lenovo instantly gains the #3 position in the U.S. among Android smartphone manufacturers, behind Samsung and HTC. According to Opera Mediaworks, Samsung has 58.45% of Android device marketshare, with HTC at 10.88% and Motorola at 8.7%.

While a long ways away from Samsung's lead, Motorola's relationship with carriers, particularly with its DROID brand, will help Lenovo jump into the U.S. market. Given how committed Lenovo has been to serving all the segments of the computer market, don't be surprised to see it put forth a similar effort in the coming years. After all, who wouldn't want a ThinkPad phone?



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