Google sells off Motorola for $2.9 billion. What does it mean for Apple? Nothing...
Google is selling off their Motorola Mobility handset business to Lenovo for $2.9 billion dollars. China Daily broke the story:
Lenovo Group Ltd is likely to buy Google Inc’s Motorola Mobility business, giving the Chinese company a bigger say in the global tablet and smartphone market. The acquisition, worth at least $2 billion, will include more than 10,000 mobile communications patents currently held by the United States company, according to a person familiar with the matter. The deal is expected to be announced on Thursday morning in Beijing.
Here are some quick thoughts:
Google paid $12.5 billion for Moto back in August of 2011, so unless there's huge swathes of the company or its assets staying put, it doesn't look like they got back anywhere near what they put in.
Lenovo seems to be interested in getting into smartphones in a much bigger way. They were rumored to be interested in BlackBerry until the Canadian government shut that possibility down.
Given what Lenovo accomplished with IBM's ThinkPad line of PCs, they have potential to do something great with Motorola's line of Android phones.
Despite that, Motorola's market share and profit share remain not so great.
Where this would leave Google in terms of putting out their own hardware is uncertain. They've partnered with several manufacturers in the past for the Nexus line, including the current Nexus 5
Google recently picked up a hell of a product team run by ex-Apple iPod lead, Tony Fadell. (Not going to say NestPhone no matter how fun it sounds!). So hopefully the spirit of those new Motos would live on.
This means absolutely nothing for Apple right now, nor in the immediate future. Even if it's confirmed, it won't mean anything for Apple until phones hit the shelves. Then it'll still depend on what Lenovorola can field, and what Apple has on the market at the time. (iPhone 6? iPhone 6s?)
Update: The deal has been confirmed. Google:
Lenovo (HKSE: 992) (ADR: LNVGY) and Google (NASDAQ: GOOG) today have entered into a definitive agreement under which Lenovo plans to acquire the Motorola Mobility smartphone business. With a strong PC business and a fast-growing smartphone business, this agreement will significantly strengthen Lenovo’s position in the smartphone market. In addition, Lenovo will 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.
The purchase price is approximately US$2.91 billion (subject to certain adjustments), including US$1.41 billion paid at close, comprised of US$660 million in cash and US$750 million in Lenovo ordinary shares (subject to a share cap/floor). The remaining US$1.5 billion will be paid in the form of a three-year promissory note.
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