It started with a rumor today and then became real when Larry Page confirmed through a blog post that Google has signed an agreement with China’s Lenovo to sell Motorola Mobility for $2.91 billions.
Back in August 15th 2011 when Google announced the acquisition of Motorola Mobility for $40 a share the whole technology word was surprised that Google is finally entering into the smartphone hardware business.
It was also rumored that Google acquired Motorola for the enormous amount of patents held by Motorola in-order to protect the Android eco-system. (Patent litigation was a big deal during that time)
Since then Google and Motorola worked together and created two great phones: The innovative Moto X and the Moto G to target wider market around the world. Unfortunately these phones came at a wrong time when the smartphone was about to be saturating and didn’t take off the way Google has expected. (Although these phones are doing well they are not up to Google’s expectation).
Here is what CEO of Google, Larry Page has to say in his blog post
We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users.
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…
With the sale of Motorola Home earlier and Motorola Mobility now, what is left with Google is the patents that came with the acquisition. With Android platform already dominating (and will continue as long as Google innovates) the world smartphone market that is all Google needs to protect the ecosystem.
Here is what Larry says about the patents in his post
And on the intellectual property side, Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners.
With this deal, Google has confirmed that their focus is fully on the software and smartphone hardware was not a great fit for the company. However their commitment to emerging markets like Google Glass, Wearable Computing, Smart home products, etc., to continue.
Here is what Larry says about other hardware stuff Google is working on
As a side note, this does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry. We’re excited by the opportunities to build amazing new products for users within these emerging ecosystems.
This is the right decision made at the right time in my opinion. It is a well know fact that Android and Software is Google’s strength. Therefore they should focus their energy towards innovation in software while leading players like Samsung, HTC, LG, Lenovo and other smartphone OEMs focus on hardware. At the end of the day, consumers will get the best of both the worlds.
What do you think about this deal? Please share your thoughts through comments below.