On January 29th, 2014, Mountain View based Google announced it would sell it’s Motorola Mobility unit to Chinese based Lenovo for $2.91 in cash and stock. The deal cuts across many spectrum including mobile OS, computing wars, and search. Here’s 12 talking points:
Source: Not sure, but not mine
- Google keeps most of the 17,000 patents which it purchased for $12.5B. This patent trove allows it to compete on Internet of Things (IoT), sensor analytical ecosystems, and other key mobile technologies.
- Google needs a counterweight to Samsung who’s been looking at swapping OS.
- Google now gains a China strategy.
- Google takes a 5.94% stake with a $750M investment in Lenovo
- Google has a less than 2% search market share in China as they pulled out in protest, but with Lenovo, they gain an ability to enter mobile search through Lenovo as a back door.
- Lenovo is a perfect mid and long-term competitor to Samsung
- Lenovo now has the key technology to launch into mobile and cut down the time to market by 3 to 5 years.
- Lenovo can build the end to end hardware platforms required for a full line of servers, laptops, tablets, and mobile devices.
- Lenovo gains a trusted partner on OS in Google Android and can plug into the ecosystem
- Microsoft continues to be isolated in market share and ecosystem and faces a distribution problem.
- Apple faces more pressure from Google through Lenovo and Samsung for OS operating share and from multiple price points.
- Dell faces more competition from Lenovo across all product lines given the acquisition of IBM’s mid range business.
The Bottom Line: Google Gains A Key Partner With Sale Of Motorola To Lenovo
While many would argue that the $12.5B spent on Motorola was over kill for a patent trove, the sale to Lenovo is pure brilliance. Lenovo represents a key distribution partner who can open up the China market, provide a counter balance to Samsung, and allow Google to keep focused on the OS ecosystem. The deal also puts long term pressure on Amazon, Apple, and Microsoft as the race to build out the Cloud to personal device network heats up. Expect the next battle grounds to show up around wearables, content, payments, identity, quantified self, and commerce.
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