Would Selling Motorola to Lenovo Solve Some Big Problems for Google? Yes.
While Motorola isn’t commenting on several reports that it could be sold to China’s Lenovo, the sale of the handset business could indeed make Google’s life easier both with regulators and Android handset makers.
(Update: Lenovo is poised to make an unspecified announcement within the hour, said sources, who said it was related to such a sale.)
A report in China Daily said earlier that Lenovo could be acquiring Motorola Mobility from Google in a deal worth at least $2 billion. Reuters has also reported that a deal is imminent, at a price of close to $3 billion.
One source told Re/code that the idea had been floated by Lenovo as far back as a year ago, while another confirmed the current talks about the transaction.
A Motorola representative declined to comment on “rumors and speculation.”
At the reported price, Google is taking a huge loss on Motorola. It announced plan to buy Motorola for $12.5 billion back in August 2011, at the time saying it was making the move to protect Android by acquiring Motorola’s patents.
On the plus side of the ledger for Google, however, is also the $2.3 billion it got by selling Motorola’s cable set-top box unit to Arris.
Motorola has since released some noteworthy phones, namely the Moto G and Moto X, and talked up a bold future of electronic tattoos and other projects led by former DARPA head Regina Dugan.
However, the handset maker has yet to regain much market share, and Google has continued to work with other handset makers, such as LG, on Nexus phones and tablets that are Google-specified, but made by others.
Meanwhile, on the patent front, Google has continued to assert Motorola’s substantial patent holdings in various cases, but courts and regulators have largely taken a dim view of issuing injunctions or large damage awards based on standards-essential patents — the patent variety that makes up a large part of Motorola’s holdings.
Word of a Motorola sale comes amid a growing peace between Google and the largest and most powerful Android handset maker, Korea’s Samsung. The two companies announced a massive cross-licensing deal earlier this month covering past and future patents. And, as first reported by Re/code earlier on Wednesday, Samsung has recently agreed to dial back some of its homegrown Android efforts, in favor of promoting Google’s suite of apps and services.
Phone makers have been unhappy ever since Google got further into the handset game; the company has also been dealing with a variety of concerns from regulators in the European Union and elsewhere. Reuters reported earlier Wednesday that Google was close to a settlement with European authorities.
- It’s Official: Lenovo Is Buying Motorola From Google for $2.91 Billion
- Would Selling Motorola to Lenovo Solve Some Big Problems for Google? Yes.
- Google and Lenovo Explain their $2.9 Billion Motorola Deal (Live Coverage)
- Buy High, Sell Low: Google’s Losing Bet on Motorola
- After Google Pressure, Samsung Will Dial Back Android Tweaks, Homegrown Apps
- Lenovo Won’t Get Regina Dugan’s Advanced Research Group in Motorola Deal