Online search engine Google has sold its Motorola Mobility smartphone business to Chinese IT vendor Lenovo for $2.91 billion.
Google acquired Motorola and its patent for around $11 billion. Though the main focus of Google was Motorola’s patent, several analysts are still questioning the intention of the internet major to buy Motorola.
The online search vendor could not grow the smartphone business due to competition from Apple, Samsung, Huawei, etc.
Lenovo, which has growing smartphone business, will try to improve its smartphone market share. At present, Lenovo is the fifth largest smartphone vendor in the world with 4.6 percent market share. It will try to overtake both Huawei (5.1 percent share) and LG (4.8 percent). Lenovo can become a serious threat to both Samsung and Apple as well.
You may read: Huawei, Lenovo, LG grab 14% smartphone market share in 2013, says Strategy Analytics
The American software vendor Microsoft is in the process of closing the $7.2 billion deal with Nokia to buy its phone business.
For Lenovo, this is the second acquisition in 2014. Earlier this month, Lenovo announced its decision to buy low-end server business from IBM for around $2 billion.
Comparing with Huawei and ZTE, Lenovo is following an aggressive acquisition strategy. Though mobile and telecom assets are available for buy outs, both Huawei and ZTE are not keen to invest via merger and acquisitions route.
Lenovo on Thursday said the decision to buy Motorola’s phone business will help Lenovo to gain a strong market presence in North America and Latin America, as well as a foothold in Western Europe, to complement its strong, fast-growing smartphone business in emerging markets around the world.
As part of the deal, Lenovo will own Motorola brand and Motorola Mobility’s portfolio of smartphones like Moto X and Moto G and the DROID Ultra series.
Google will maintain ownership of the majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures.
As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio.
Motorola Mobility is currently the #3 Android smartphone manufacturer in the U.S. and #3 manufacturer overall in Latin America.
Baburajan K
editor@telecomlead.com
