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Google to Sell Motorola to Lenovo

Jan. 29, 2014
In a blog post, Google CEO Larry Page said Google bought Motorola "to help supercharge the Android ecosystem" and that goal has been accomplished.

WASHINGTON - Google announced Wednesday it signed a deal to sell its struggling smartphone unit Motorola Mobility to Chinese tech giant Lenovo (IW 1000/134) for $2.91 billion.

"Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem," Google CEO Larry Page said in a joint statement announcing the deal.

Lenovo Chairman and CEO Yang Yuanqing said the acquisition "will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space."

The move comes after Google's biggest-ever takeover at $12.5 billion, announced in 2011 and finalized in 2012.

Even under Google, Motorola has failed to gain traction in a rapidly evolving smartphone market now dominated by Samsung and Apple (IW 500/4).

While Google would be taking a loss on the sale, it did spin off the Motorola Home division for $2.3 billion in 2012 and sold off some of its manufacturing facilities.

Some analysts said Google's main interest in Motorola would be the portfolio of 17,000 patents, the majority of which will be kept by the California group.

"Google got what they wanted and needed from Moto -- they got patents, engineering talent and mobile market device insight," said technology analyst Jack Gold.

"They don't need to be in the device business... This is a win for Google and a win for Lenovo in my opinion."

In a blog post, Page said Google bought Motorola "to help supercharge the Android ecosystem" and that goal has been accomplished.

"But the smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices. It's why we believe that Motorola will be better served by Lenovo -- which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world," Page said.

"This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere."

Figures released Wednesday by Strategy Analytics showed Google's Android system was used on 78.9% of smartphones sold globally in 2013.

A report by IDC showed Lenovo was the fifth-largest smartphone maker in the fourth quarter with a 4.5% market share, barely behind fellow Chinese maker Huawei and South Korea's LG.

Motorola is not among the top global smartphone makers but has around 7% of the U.S. market, according to analysts.

Copyright Agence France-Presse, 2014

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