Motorola Goes China

Two and a half years after the well known $12,5 billion Google and Motorola Mobility deal, the alliance between the two has eventually cracked. Currently, numerous IT experts call it the biggest mistake ever omitted by the Internet giant. 

By the end of January 2014, it became known that Google has sold the Motorola to the Chinese Lenovo for “only” $2.9 billions. Everything has happened very unexpectedly and was a shock for many, since they thought that Google and Motorola union would remain untouched for years. At least, the Google top managers have highlighted it numerous times back then, stating that the deal would lead to Google’s domination on the world’s smartphone market, as they had access to thousands of technologies patented by Motorola. All these statements were also supported by the intensively promoted Moto X smartphone, and the factory built in Texas.    

Now, the entire IT industry can do nothing but wondering what could went wrong within this deal, and what has actually led Google to sell Motorola about four times cheaper than it was purchased. It is interesting that after the official announcement of the deal, the Google shares went up immediately, while the company reps still remain silent about the new deal with Lenovo.

Anyway, it should be noted that the recent deal is no so unprofitable as it may seem. First of all, Google has got rid of the useless Motorola Mobility subdivision, specialized in top-box manufacturing (the latter was acquired by Arris for about $2.5 billion). Moreover, two and a half years ago, Google has obtained about $3 billions of Motorola, which went to the Internet giant as a bonus. In a rough calculation, it is obvious that in the current scenario, Google has only lost about $3 billion. What is more, even Lenovo has purchased the entire Motorola division, almost all of the company’s patents remain under Goggle’s authority, and Lenovo will be allowed to used only a limited amount of the patents, strictly per license agreement. Another interesting fact is that only the patent package by Motorola is estimated at five and a half billion dollars.

Therefore, it is obvious that Google has achieved its main goal; even though both Moto X and Moto G have not become kind of sensational devices, the company has set up the customized manufacturing of the Motorola smartphones using Android OS, which can be considered as another huge leap in invading the mobile OS market.