The rumour of Lenovo wanting to buy Motorola was confirmed few hours ago and the deal finally went through.
Lenovo which is a strongly emerging Chinese computer company was making a bid to buy Motorola from Google few days back when the rumoured leaked. However, at the end of close of business yesterday, the company was able to successfully buy the handset unit of Motorola which also comes with portfolio of patents.
Lenovo paid Google $2.91 billion to acquire Motorola according to the info on Google's website which is really far away from what Google herself paid to acquire Motorola few years back ($12 billion).
Lenovo will pay cold cash to Google up front, which equates to $660
million, along with $750 million in stock, while the rest of the $1.5
billion will be paid out in the coming three years.
This may suggest a kind of loss by Google in this regard, however, Google doesn't see that way. Google had been experiencing difficulties in turning the Motorola handset unit into some great in terms of profit and therefore selling Motorola to Lenovo is more like removing a pain-in-the-ass for the company even though Moto X and Moto G were very successful devices that are highly placed in the smartphone market.
Now, phones like Moto X and Moto G among others are now owned by Lenovo and the sales and profit made from them henceforth would go to Lenovo.
Lenovo had also been in the smartphone market for a while even before names like Samsung and HTC became a hit but Lenovo phones were not able to stay strong and known like the aforementioned devices.
Surely, buying Motorola would see Lenovo better position itself to be seen to rival Samsung and other big players in the smartphone industry.
It is believed by some that the relationship between Samsung and Google could be the driving force in selling Motorola to Lenovo at such throwaway price.
Whether this is true or not remains to be seen however, what is done is already done. We now have to look at what Lenovo would do with Motorola and how it will set the Chinese company in a great position.
What are your thoughts about this? Drop your comments below.
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"Lenovo which is a struggling Chinese computer company......"
ReplyDeleteStruggling? You are totally wrong here. Lenovo has a rapidly growing smartphone business and is the largest (and fastest growing) PC manufacturer in the world. The 'struggling' company edged out hP from number one spot.
Secondly, the sale of Motorola isn't a loss to Google, see http://blog.gsmarena.com/how-much-did-google-truly-loose-from-motorola/ for a very basic break down. For more complex Analysis, do a google dearch. Alledgedly Google made a loss of a paltry (by their standard) $1.6billion and when you take into account the 17,000 patent (a vast majority which are directly linked to mobile technology) Google retains from Motorola, its actually NOT a loss as they would realise way more than that.
Smart company
On careful reading of the link you provided I would say that I am wrong to call it a struggling company. Lenovo is fast becoming a force. However, the smartphone section of the company struggled and buying Motorola may better put it in a better position.
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