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30 May 2024

Google sells Motorola to Lenovo; loses Dh27bn


Google announced Wednesday it signed a deal to sell its struggling smartphone unit Motorola to Chinese tech giant Lenovo for $2.91billion.

The move comes after Google's biggest-ever takeover at $12.5bn, announced in 2011 and finalized in 2012.

It did spin off the Motorola Home division for $2.3 billion in 2012 and sold off some of its manufacturing facilities. However, Google would still be taking a loss of an estimated $7.29bn (Dh26.77bn) on the sale, 

Even under Google, Motorola failed to gain traction in a rapidly evolving smartphone market which is now dominated by South Korea's Samsung and US-based Apple.

"Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem," Google chief executive Larry Page said in a joint statement announcing the deal.

Lenovo chairman and chief executive Yang Yuanqing said the acquisition "will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space."

Some analysts said Google's main interest in Motorola would be the portfolio of 17,000 patents, the majority of which will be kept by the California group.

"Google got what they wanted and needed from Moto -- they got patents, engineering talent and mobile market device insight," said technology analyst Jack Gold.

"They don't need to be in the device business... This is a win for Google and a win for Lenovo in my opinion."

In a blog post, Page said Google bought Motorola "to help supercharge the Android ecosystem" and that goal has been accomplished.

"But the smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices. It's why we believe that Motorola will be better served by Lenovo -- which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world," Page said.

"This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere."

Figures released Wednesday by Strategy Analytics showed Google's Android system was used on 78.9 percent of smartphones sold globally in 2013.

A report by IDC showed Lenovo was the fifth-largest smartphone maker in the fourth quarter with a 4.5 percent market share, barely behind fellow Chinese maker Huawei and South Korea's LG.

Motorola is not among the top global smartphone makers but has around seven percent of the US market, according to analysts.