Patents, Samsung wins and enterprise: 5 views on the Lenovo Motorola deal

Lenovo Motorola

Two and a half years after buying Motorola Mobility for US$12.5-billion, Google has sold the handset maker to Chinese tech giant Lenovo for just US$3-billion.

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That may sound like a substantial loss, but a look around the web will tell you that it’s pretty much a win for everyone involved (and even some who aren’t directly involved). A lot of that has to do with the 17 000 or so patents that Motorola had when Google bought it. Part of it however is down to the fact that Google no longer has to try and figure out to do with a resource-intensive division that probably wasn’t making it all that much money in the first place.

It also gives Lenovo an easier entry point into the US and the expertise of a group of people who seem to have figured out how to build a good quality, reasonably priced smartphone (witness the Moto G).

In a bid to untangle the deal, we’ve collated some of the best opinions from around the web.

Google wins by dumping Motorola on Lenovo — and so does Samsung: Dan Rowinski (ReadWrite)

According to ReadWrite’s Dan Rowinski, dumping Lenovo signals a serious win for Google. When you add the sale of its set-top box division to the Lenovo deal, Google’s recouped pretty much half its costs in the company. That means that Motorola’s patent trove effectively cost it US$7-billion.

“If we compare that to the US$4-billion or so the Rockstar Consortium spent on Nortel’s patents,” writes Rowinski, “it doesn’t look all that unreasonable”.

Samsung meanwhile wins because Google’s suddenly out of the handset business, making the 10-year patent licensing and app deals between the two companies a lot smoother.

Lenovo’s Motorola Mobility buy is partly about the chance to own the enterprise mobile market: Darrell Etherington (TechCrunch)

Despite a spectacularly unwieldy headline, Etherington actually makes a valid point. Lenovo already pretty much has the enterprise notebook market wrapped up. It’s also doing pretty well on the tablet front. Buying Motorola therefore gives it the chance to present a fully integrated offering in the enterprise space.

As Etherington notes:

It’s true that the company already sells Android phones abroad, and that these aren’t necessarily enterprise-focused. But the ongoing demise of BlackBerry leaves a gaping hole in the industry in terms of secure devices, and so far the only company really making a concerted effort to capture the attention of that market is Samsung, which has been touting its Knox security software for Android a lot in the past few months. But Knox isn’t without its detractors, and Samsung hardly has the brand cachet that does Lenovo when it comes to building enterprise hardware.

Larry Page makes case against his own Motorola purchase: Rachel Metz (TechnologyReview)

Metz is one of the few voices suggesting that Google didn’t get all it could out of the Motorola deal. For her, the sale to Lenovo is an “admission of defeat”. In effect, she says, Larry Page is owning up to the fact that Google had no real place playing in the handset business.

Unlike many online commentators, she reminds us that Motorola wasn’t exactly a money-making machine — even with Google’s aid:

Google has invested in revamping the company’s image and released some impressive new handsets like the Moto X, but Motorola is still not a moneymaker. In the first three quarters of last year, it cost Google hundreds of millions of dollars.

Lenovo to buy Motorola: a bittersweet, logical deal for everyone concerned: Harry McCracken (Techland)

There aren’t many in the tech analysis game more straight-shooting than McCracken and his headline pretty much tells you everything you need to know about this piece.

The Techland writer says that when Google first bought Motorola, he’d expressed hope that the two companies would “make the very best phones they knew how, with the sort of integration of software, services and hardware that can only emerge from one team”.

Given that the deal was mostly about patents however, that was never really all that likely to happen. Selling the handset business to Lenovo is therefore pretty logical. Google got what it needed out of the company.

McCracken also notes that owning Motorola helps Lenovo fast-forward its US ambitions. He points out that while US regulators may have similar issues with the buyout as the Canadian government did with its attempt to buy out BlackBerry, it’s probably the best possible outcome for Motorola Mobility:

There’s going to be plenty of similar debate in this country, too, before any sign-off from the feds. But if it happens, Lenovo — which has done well by the IBM PC business it bought almost a decade ago — stands as good a chance of figuring out what to do with Motorola as any other prospective acquirer which comes to mind.

Buy high, sell low: Google’s losing bet on Motorola: John Paczkowski (re/code)

Of the voices calling the Lenovo sale a dud for Google, Paczkowski’s is perhaps the most vociferous. He argues that “the whole affair is arguably one of the worst investments in Google’s history”.

Among the reasons he puts forward for this argument are Motorola’s poor performance under Google’s ownership, as well as the fact that the internet giant brought the company “regulatory scrutiny, and some embarrassing courtroom losses”.

Like many though, he sees some serious potential positives for Lenovo with the deal.

As Paczkowski points out however, one crucial question remains unanswered: “Just why did Google buy Motorola in the first place?”

Image: Google.

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