Hi, this is Wayne again with a topic “Google Sells Motorola: Explained!”.
This week, lenovo bought motorola from google for 2.91 billion dollars. Now in case you forgot, google just finished buying motorola mobility in 2012 for 12 billion dollars. This is something that needs explaining hey what is up guys mkbhd here now as disclosure. A lot of the details of this deal are private and i’m not going to disclose anything.
That’S supposed to be private, obviously, but i have been in contact with motorola as a lot of you guys know and i’ll continue to stay in touch with them. But right now, with all the details that we have, this is everything you need to know about motorola being purchased from google by lenovo. Now, since there were three major players in this deal itself, there are three perspectives to be able to see this from from lenovo’s perspective from motorola’s perspective and from google’s perspective from the lenovo perspective. This is an investment to dive head first into the smartphone market. In the united states uh and to be honest, this was basically a steal for them at 2.9 billion dollars, they could have done a lot worse, plus they’ve been on a bit of a spending sphere recently, anyway, after buying ibm servers.
But the idea here is, when you think of lenovo: what do you think of you think of the pc manufacturer, because that’s what they do, they make think pads their main competitors being dell and hp. What you don’t think of when you think of lenovo is smartphones in the united states, because that’s just not what they do here fun fact, though, lenovo is number five in the count of total smartphones shipped in the fourth quarter of 2013 worldwide they have a killer International presence they’re one of the biggest smartphone sellers in the world. So obviously, since the pc market isn’t exactly exploding, they figured they’d focus on mobile and what better way to do that than to buy up a company in the united states and get a huge kickstart on entering the us smartphone business instead of starting from scratch. Lenovo by buying motorola gets all of motorola’s relationships with us carriers, all their product designers and their development team and motorola’s reputation.
They get all that in a bundle. That’S what we like to call brand equity and if lenovo is smart they’ll, keep that they’ll, keep the motorola name up front and continue operations just the way they were business as usual, just with lenovo pulling strings behind the scenes. Lenovo’S hoping that moves like this will in five years or so make them number one in the united states, it’s possible, you know, i, you know the number one thing i’m worried about here with lenovo is that if you look at all the other designs of their Phones, they are really bland and obviously they’re all mid-range to low-end phones for the most part, but i’m not very excited about lenovo phone designs from what i’ve seen and i don’t even know if those will do well in the united states.
So what i’m hoping is they definitely keep those motorola designers on board who are helping around with the moto g and moto x and get them very into the talks of the next motorola smartphone. The motorola perspective is really not all that interesting. You know a deal is a deal they’re kind of being tugged back and forth right now but, like i said, if lenovo is smart and if they continue with that motorola branding and they leave the motorola name up front, they shouldn’t have any problems and they should Let motorola operate like business as usual. That’S what they were doing underneath google, a lot of people think that they were working like this with google. They were kind of working with google behind the scenes, and lenovo needs to be that behind the scenes again, even if they want their name on everything and then there’s the google perspective, which is a lot more interesting because it’s actually about more than just motorola.
So when google first bought motorola mobility for 12 billion dollars back in 2012, there’s a lot of speculation about. Why did they do this? Are they going to make a phone together? Is the next nexus gon na be a motorola phone? Those were serious, uh questions that people had so basically to clear it all up. Uh for the financial purchase, google made a blog post on their site and it’s actually still there i’ll have it linked below the like button, where they gave the reasons and the benefits for buying motorola and those two main reasons were. They might make some phones together.
Work together, a little bit and motorola’s patent portfolio with the motorola acquisition, google picked up more than 15 000 patents to protect android. Now, of course, after this acquisition, a lot of us are still asking the question like moto nexus. Is that happening or not? How closely is google working with motorola now check out this clip from the interview i had with the ceo of motorola literally about two months ago, so back to just a whole motorola thing uh as you guys as google and motorola work together.
I have no idea how closely or far apart, they’re working so what are like, google and motorola working on together, because moto x was a pretty awesome collaboration in the first place. Well, no moto x was all motorola i mean so motorola is we’re owned by google. So we have um financial support from google, but we operate completely independently and and and google has been pretty clear that it wants to preserve that independence, because android is an open source platform and it’s important for uh any partner who wants to build a product based On android to be treated the same way, so if you’re, samsung or sony or htc – and you hear that you know sure you could take his word for it. But honestly, ever since that acquisition, it seemed like to a lot of people and a lot of vendors that now motorola was the favorite oem motorola got first dibs motorola was the favorite of google who was making android and that made a lot of them uncomfortable and A lot of them like samsung, made moves away from android and started to prepare themselves. Otherwise you can see a lot of this in samsung’s touchwiz and their new magazine ui. But, yes, google did believe it or not keep up a firewall between them and motorola. Then lenovo came along with their ambitions and they said hey can we buy that from you and they said sure, but they sold away parts of motorola, not all of it. They kept that massive patent portfolio and they also kept under the android division. The advanced technology and projects part which was responsible for project aura, the modular smartphone concept, so they kept a lot of cool stuff and they’ll continue to work with that.
The rest of motorola mobility was sold for 2.91 billion, still pretty low, still a steal for lenovo, but obviously a great acquisition. So, if my math is right, google gave lenovo a hell of a deal and also values those thousands of patents. A lot like at billions of dollars, try suing us now apple, like that’s some serious patent protection right there. I should also note that google also bought nest for three billion dollars. Nest is the makers of those beautiful, smart, thermostats and smoke detectors, and things like that, and they also already also seem to be integrating with google way more than motorola ever did so they seem to be much more of a hardware partner, so i’m actually excited to See what they do together, so the number one question we’re seeing now is what is going to happen to current motorola devices like the moto x and the moto g. Just a couple of weeks ago, i was at ces talking with rick osterlow, who was the vice president at motorola, who was showing me. You know really proud of all the updates they’re rolling out with and he was showing out the new wood back for the moto x that was going to be available soon. Does that all just stop? Well again, if lenovo is smart, they won’t touch a thing they’ll.
Let it continue business operations as usual and then slowly take advantage of motorola’s resources and relationships later so i’ll say right now. This doesn’t affect the day-to-day stuff that motorola is doing with moto x and moto g. But again the thing about these things is these deals. They take a while they’re large financial transactions they take a while to go through so i’ll keep in touch with them, and if i hear any updates, i will let you guys know on twitter.
If you guys want to follow at mkbhd, you will definitely hear the first of that now. You might have also heard that google and samsung have been in these talks and that they might have something to do with the sale. So the end result of this is that google’s selling motorola to stop competing with samsung and others and samsung is asked by google to stop altering and screwing with android so much uh, and even if that wasn’t the original intention of the deal it still has.
That effect, ever you know, ever since google bought motorola, there was always that awkwardness about the other manufacturers, because, like i said it felt like motorola, was the favored one. So now that google has sold motorola, there is no favored one google’s not competing anymore. You know they’re not part of motorola, now it’s an open, even playing field, and they asked that samsung dial it back a bit and let google control android a bit more in return, so google’s making moves – and you know i understand it – may be kind of sad To see google and motorola split because it seemed like right when motorola started working with google, they started doing really great things. They were on a roll with the moto x, a great phone and a moto g, a really inexpensive value phone. But you got to remember that it’s been reiterated by motorola people over and over again that that was all motorola and that they will continue to do awesome stuff like that, even without google’s financial backing, because they’re in a different mindset altogether, even if they’re under lenovo.
Now, instead of google, so to summarize, google buys motorola for the patents supercharges them a little bit and then lets them go and lenovo comes in and buys them and hopes to keep the momentum going and try to make some money off of it. We’Ll see how that goes. Samsung, on the other hand, was asked by google to tone down with the touchwiz customizations. We will stop competing we’ve sold motorola.
The playing field is even we just want to control android, so this has been mkbhd. Thank you for watching guys, and i hope you continue to watch because i will have my eye on all three of these companies for 2014.. Thank you for watching and i’ll talk to you guys in the next one. Peace do .