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Friday, October 31, 2014

It's official: Motorola Mobility now belongs to Lenovo


Lenovo said Thursday that it has closed its acquisition of Motorola Mobility, gaining a larger foothold in the US and other developed markets.
Under the agreement, Lenovo will pay former parent Google $2.91 billion, including $660 million in cash and $750 million in newly issued Lenovo stock. The remaining $1.5 billion will be paid to Google in the form of a three-year promissory note. While Lenovo gets Motorola's mobile device business, Google keeps the patent portfolio.
The transfer of Motorola to Lenovo from Google marks the end of a short chapter for the storied handset vendor. Credited with the invention of the cellphone, Motorola had suffered over the last several years as Apple's iPhone and Samsung's Galaxy lineup rose in prominence. Under Google, Motorola had refined its product portfolio to just a few devices, and developed a focus on the low end and on emerging markets with its affordable Moto G and Moto E smartphones.
The combined operations will have 8 percent of the global smartphone market, making it the third-largest smartphone vendor in the world, according to Strategy Analytics. The research firm said the two businesses will benefit from increased scale, deeper distribution channels and bigger marketing and R&D budgets, but must contend with a slowdown in growth at Lenovo and Motorola's continued losses.
"Merging these two firms next year will not be as easy as many expect," the firm said in a post.
Motorola will continue to operate out of Chicago and will still be led by President and Chief Operating Officer Rick Osterloh.
"With an impressive portfolio of smartphones, wearables and PCs, our two companies will be uniquely positioned to push the boundaries of choice and value, and bring exciting new experiences to people everywhere," Osterloh said in a blog post.
He added later that he doesn't believe Motorola's strategy of using an unaltered version of Android with a few software additions would change under Lenovo, which more heavily customizes its Android smartphones.

Madhav Biju

Author & Editor

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