Are Lenevo phones worth buying?

Google sells cell phone subsidiary Motorola to Lenovo at a loss

Google sells the mobile phone manufacturer Motorola to the Chinese IT group Lenovo. Google posted a huge loss through the sale: Lenovo is now paying $ 2.91 billion, Google itself had only acquired Motorola in 2012 for $ 12.5 billion.

Motorola portable radio from 1948: The traditional American brand, acquired by Google in 2012, is now Chinese. The IT group Lenovo has taken over Motorola. After all, there should still be smartphones under the Motorola brand.

Photo: Flickr / Kevin Trotman

With the acquisition of the long-established American company Motorola, Lenovo is following its strategy of expanding the business with smartphones and tablets. So far, the Chinese home market in particular has been Lenovo's strength. But this market alone has made Lenovo the fifth largest cell phone manufacturer in the world. According to the market researcher Strategy Analytics, Lenovo has moved up to third place behind Samsung and Apple with the acquisition of Motorola.

Lenovo intends to continue using the Motorola brand name

"We want to become a global player in the smartphone sector," Lenovo boss Yang Yuanqing told the Wall Street Journal after the deal was announced. Lenovo plans to sell 100 million cell phones worldwide in the next year. He sees the Motorola brand as an "abbreviation" for the American market. Lenovo intends to continue to use the Motorola brand name.

With Motorola, Google does not only make losses through sales. Attempts to integrate the company into the group with layoffs, investments and restructuring failed. Even new models such as the Moto X, the inexpensive Moto G or the project of a modular smartphone did not lead to economic success. Of a total of 20,000 employees when it was taken over by Google, the company now employs only 3,800.

Motorola still had a large number of patents when it was bought by Google: Google wants to keep most of them in order to secure the rights to its widely used Android operating system for mobile phones and tablets. Around 2000 Motorola patents go to Lenovo in addition to telephone production.

Above all, Google gets Lenovo shares for Motorola

Of the total purchase price of $ 2.91 billion, Lenovo will pay Google only $ 660 million in cash. In addition, there are Lenovo shares valued at $ 750 million. The remaining $ 1.5 billion will be settled on papers with a term of three years.

Google CEO Larry Page said the sale of Google's cell phone division doesn't mean a major change for Google's other hardware businesses. As examples, he cited the wearable and home market, i.e. Google Glass and the recently purchased building technology. What Page did not say: With the sale, Google's dream of owning a cell phone and integrating hardware and software from a single source is planned. That is exactly the recipe for success of the competitor Apple.

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