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AH Primetime: What Does ‘Lenovorola’ Mean For The Mobile Field?

February 3, 2014 - Written By Patrick Northcraft

This past week has been flooded with news reports on Lenovo, Motorola, and Google.  Let us take a step back and see what happened, for those of you who haven’t been following this storm of news and want a centralized synopsis of just what the heck happened.  The first thing to note is that almost two years ago, Google purchased Motorola Mobility for $12.5 billion.  We expected a new superpower to emerge from this, combining Moto’s manufacturing with Google’s software prowess.  Unfortunately, that did not happen, with the Motorola branch actually losing Google $1.3 billion last year.  However, in the purchase of Moto Google received their impressive portfolio of almost 17,000 patents, which Google valued at around $5.5 billion.  Google then had a cushion against the then-brewing patent wars, and was able to defend themselves more adequately.  Google also got Motorola’s advanced research and development group that was and is still headed by the former head of the U.S. military’s R&D wing, Regina Dugan, who is working on things like modular smartphones, electronic tattoos and smart pills.

Fast forward two years to this past week when Google sold Motorola for $2.91 billion to Motorola.  An important fact to remember is that Google did not sell everything that they bought.  They kept 15,000 of the 17,000 patents that they bought two years prior, and sold Motorola Home, the company’s TV set-top business, off to Arris for $2.6 billion.  This means that in total Google brought in almost $5.4 billion from the selling of Motorola, which almost covers what they valued Moto’s patent portfolio at.  Google also received 5% ownership in Lenovo as a condition of the sale.

Alright, now with the history out of the way we can look at what this means for the future of Android and the mobile world.  First off, Google and Samsung can be a lot more friendly to each other.  As Samsung makes roughly 33% of all the world’s mobile handsets, they would be a great friend to have.  Since Google and Samsung are no longer direct sales competitors, the two tech giants can focus on providing the best services to their consumers.  Samsung can make their apps more Google-friendly, and they can lay off a little bit on the threat of Tizen, which we won’t be seeing in the States anytime soon regardless.  Some people say that the Google-Samsung patent license agreement was made because Samsung had insider knowledge of the Lenovo sale.  While this is possible, all it means for us is better products.

Next, we need to look at China.  Google has not had the best time in China, with their market share there being only 1.6%.  Lenovo is the second largest smartphone manufacturer in China, so having them work more closely could open up the mobile markets over there.  Only 3.5% of Android devices there actually utilize the Play Store, so Google’s presence is currently very limited.  Hopefully, Lenovo will offer more Google services to the Chinese market and give Google a more global presence.

Going off what I said before, now that Google is not a direct sales competitor in the hardware realm means that there can me much more cooperation between manufacturers and Google.  They can now focus on software and continue to grow the Android OS just as they have been doing, if not better than ever before.  Since Motorola is a recognized American brand, Lenovo will also gain from having more customers in the US.  Currently, they do not have much of a mobile presence here, selling mainly PC’s and tablets in the States.  With regards to Motorola itself, Lenovo says that they will be keeping things just the same for the foreseeable future.

All-in-all, this acquisition covers some important things.  Google can now work better with manufacturers, allowing for more cooperation and development of efficient software.  Lenovo can get involved in the US markets, accessing customers that they have never had before, and the same goes for Google with China.  This creation of ‘Lenovorola’ has opened the door for more globalization of Android and Google, and will hopefully create more and better software and hardware as time goes on.  Do you have any thoughts on this?  Let us know in the comments down below!

Source:  Computer World