Google has sold struggling US mobile phone company Motorola Mobility to
Chinese computer maker Lenovo for $2.91bn in a surprise move. Google had paid $12.5bn for the company less than two years ago. Lenovo
plans to build up its smartphone unit through the Motorola purchase, which may
help offset its slowing personal computer business.
However, Google will keep the majority of
Motorola's lucrative patents, which include one for Android software. In a statement, Google said the smartphone
market was "super competitive" and that Motorola would "be
better served by Lenovo". The purchase is set to make Lenovo the world's
third-largest smartphone maker behind Samsung and Apple.
Market research firm Strategy Analytics said in a blog post that Lenovo had made "a good
move" and would benefit from economies of scale. "The Chinese vendor
gets access to the valuable US smartphone market and the fast-growing Latin
America region. This complements its existing global PC business.
"For Motorola, it gains access to an ambitious
sugar daddy that has a strong presence in the huge China market. For Google, it
divests a loss-making hardware division," it said.
This is
the second major acquisition for Lenovo in the same number of weeks. Last
Thursday, the Thinkpad-maker announced it had acquired IBM's low-end server
business for $2.3bn, in what was then China's biggest technology deal. Shares
of Lenovo being traded in Hong Kong fell by more than 8% following the
announcement, which came after the US market had closed.
"Whether
Lenovo can turn around the long-struggling Motorola business, and what happens
to the Motorola brand long-term, remain key questions that will need to be
answered in the coming months," Strategy Analytics said.
Source: BBC
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