Editorial: Google asset strips Motorola, dumps corpse on Lenovo

29th January 2014

When Google bought Motorola Mobility for $12.5bn back in 2011 there was some speculation that Google might just be interested in Motorola's patents. This came at a time when Motorola was beginning to pick up with the launch of the Motorola RAZR, but despite modest success in the US these smartphones failed to make the breakthrough that they needed.

Eventually the Google influence kicked in with the well-received but hardly market leading Moto X and Moto G devices - the only two worldwide smartphone releases of 2013 - and these too enjoyed some moderate successes, with the Moto G topping the SIM-free charts at Amazon.

But, as we predicted at the end of 2013..

Google must continue to improve Motorola's range if it is to remain in touch with the market, or else investors might start to question why Google bought Motorola at all. It may well be that Google might divest itself of the handset business in the future but keep the extensive collection of patents, especially if sales do not begin to improve more dramatically.

Well, it seems that the uncertainly is over with Google effectively asset stripping Motorola Mobility of most of its patents and then dumping the rump on Chinese firm Lenovo for a mark-down of nearly ten billion dollars in a deal that values Moto at just $2.91bn.

Lenovo is no stranger to picking up iconic American brands, acquiring IBM's desktop and laptop PC line in 2005 and their x86-based server line just this year. But the PC market is fading and Lenovo have failed to make much headway in tablets and smartphones outside of their native China.

At Mobile Gazette we've had a love-hate relationship with Motorola over the years, but we really do want to see Motorola as a competitive and innovative company that drives the market forward. Looking back over the past twelve months it seems pretty clear that Google have been pretty clueless about running a hardware company, and we are very disappointed that the naysayers who said that Google had ulterior motives seem to be correct.

In fact, this whole takeover is perhaps reminiscent of HP's takeover of Palm in 2010, a doomed deal that was a complete disaster all the way around. Is Lenovo that much different from HP? Can it turn Motorola around?

We would like to be proven wrong, but we think that this might well be Motorola's last gasp. Lenovo have singularly failed to make any impact in the mobile market in North America or Europe, and putting Motorola into their hands does not bode well for the future of this pioneering company. But then perhaps there was never going to be a way back from the terrible Ed Zander era despite Motorola's best efforts.

Conrad Longmore
Editor, Mobile Gazette