Lenovo has shown its attentions towards the acquisition of Motorola Mobility’s entire business unit from Google. Under this agreement, Lenovo will own and oversee the businesses of renowned smartphone lineup. This will help Lenovo to stabilize its smartphone segment in the market.
Lenovo itself is a subsidiary of International Business Machine (IBM) – a part of its PC business unit. IBM took over Lenovo in 2005, which means that IBM will be the new boss of Motorola division. This decision will lead Lenovo expand its reach to the regions where Motorola has a strong foothold, like North America, Latin America, and Western Europe.
Motorola is currently holding thousands of patent assets, as being third largest Android smartphone manufacturer. Among these patents, only 2000 will be handed over to the new owner. Although rest of the patents will still be kept and owned by Google, Lenovo will have the license to access and make use of these un-retained patent archives.
The overall acquirement will cost Lenovo up to US$2.91 billion. Of this total amount, US$660 million will be paid in cash, while US$700 million will be in the form of Lenovo’s ordinary shares. Remaining payment of US$1.5 billion will base on a three-year promissory note.
Before this deal, Lenovo already had an association with Google by having Google Android on its existing smartphone lineup, including VIBE & K Series, S Series, P Series, and A Series. The addition of Moto G, Moto X, and DROID to the existing array of smartphones will enable Lenovo to stay competitive in the mobile industry.
On the other hand, Google may also be facilitated from this deal in future, by increasing its productivity of Android in China. Currently, Android devices in Chinese smartphone market do not allow users to access Google’s Play Store. Lenovo as being a China-based brand may find a way out for Google.