The Motorola-Lenovo Deal: What We Know So Far
Not even 2 years after Google purchased Motorola for $12.5 billion, the search giant will be selling off Motorola to Lenovo for about $3 billion. The big thing that all of us are thinking now is how exactly does this affect us, our future purchases, and the mobile market in general? One of the major benefits that Google gets by selling Motorola is that they will be giving it to a company that already mass-produces technology on a global scale. This deal will allow more Moto phones to get out there, and these phones will more than likely be running Android, growing the brand recognition.
Now to the nitty-gritty of the deal itself. We know that Lenovo will be paying $2.91 billion for Moto, of which $1.41 billion will be paid at close, consisting of $660 million in cash and $750 million in Lenovo stock shares. The left over $1.5 billion will be paid through a three-year promissory note. We aren’t sure exactly what will happen to the name ‘Motorola’, as Lenovo has a history with changing names of companies that they have bought (for example, when they bought IBM’s computer business). Regardless of name, Lenovo wants to keep the brand identity of Motorola intact. They will receive over 2,000 patent assets, while Google will maintain a “vast majority” of Motorola’s current patents in an effort to “defend the entire Android ecosystem”. Lenovo hopes, with their hardware experience and global business, to make Motorola a worldwide entity, as opposed to the mostly North American and European presence it is now. They predict that they can sell 100 million smartphones worldwide
It is important to keep in mind that this deal has yet to become approved by all the lovely regulatory agencies that deal with these kinds of things in the U.S. or China. It will most likely take around 6 or so months before the sale goes through. Until then, nothing will really change. Google CEO Larry Page says that he is excited to see what comes from Moto’s 2014 smartphone line up, so it sounds like we won’t have a ‘lame duck’ period in between the announcement of the deal and the transaction itself. As of now, Lenovo says that they won’t be laying anyone off, but that they need to consider all economic options before committing to manufacturing strictly in the U.S. How do you feel about this? Has Google made a huge mistake, or is this a strategic move in a much bigger game? Let us know below!
Source: Droid Life