Google sells Motorola arm to Lenovo

January 30, 2014 | 10:34

Tags: #financial #motorola-mobility #moto-x #phonebloks #project-ara

Companies: #google #lenovo #motorola

Google has surprised investors with the news that it is to sell its Motorola Mobility division, purchased back in 2011, to Lenovo at a considerable loss - but claims it's keeping enough back to make the investment worth the deal.

Google completed its acquisition of Motorola's mobile arm, signalling that company's exit from the smartphone, tablet, cable modem and set-top box markets, back in November 2011 in a deal valued at $12.5 billion. In December 2012, following office closures that lost 4,000 former Motorola staffers their jobs, Google announced the sale of the division's cable modem and set-top box arms for $2.35 billion but retained the core focus of smartphone development.

Since then, Motorola has released just two major products: the Moto G and Moto X smartphones, both - unsurprisingly - running Google's Android operating system. Those, however, could be the last to feature the brand as Google has flogged Motorola Mobility to Chinese technology giant Lenovo for $2.91 billion - an apparent loss of $7.24 billion in under three years.

Google, however, claims that it is in fact gaining from the deal. While most of Motorola Mobility's various assets are heading to Lenovo as a result of the deal, Google is hanging on to the bulk of the company's patent portfolio. Additionally, Motorola's Advanced Technologies and Projects research and development arm is staying with Google and being folded into the Android team.

The latter means Google retains ownership of Project Ara, the Phonebloks-inspired effort to create an open and modular smartphone platform which users can upgrade and modify at their leisure. Originally due to ship development kits by the end of 2013, it's not known how the deal will affect the already very vague release timescale for the project.

For Lenovo, it's a serious commitment to the so-called post-PC era, following the company's decision to sell off its own smartphone and tablet division in 2008 for $100 million, only to change its mind and buy it back a year later for $200 million.
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