Google Sells Motorola Handset Business to Lenovo for $2.91 Billion

Google Inc.'s experiment making Motorola phones has ended after just 22 months, with the company unloading the handset business to China's Lenovo Group Inc.for $2.91 billion but keeping a valuable trove of patents.

Motorola Moto X smartphones, using Google's software, shown in August.

The reason Google gave for selling of the Motorola phone business is that it want to focus on Android , smart devices.

CEO Larry Page says Google wants to focus on Android and believes Motorola will be “better served” by Lenovo in the “super competitive” smartphone market. Google will continue its investments in other hardware such as wearables and smart home devices.

Google said that the smartphone market was incredibly competitive

Page says the decision was made because of the “super competitive” nature of the smartphone market. “Motorola will be better served by Lenovo—which as a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world,” Page said today. “This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.”

Though the compnay has sold its phone unit (Motorola mobility) but it doesnt mean that company is not focussing on the hardware design.Earlier this month, Google spent $3.2 billion to acquire smart thermostat maker Nest and bought several robotics companies last year. Page made a point of noting that Google’s vision for smart devices like the Nest and Google Glass, its Internet-connected eyewear, remains a focus for the company.

(In terms of whether Google has lost money on the deal, the New York Timesand others note that Motorola had about $3 billion in cash on hand and $1 billion in tax credits when it was acquired, reducing the effective purchase price to about $8.5 billion. Google also sold Motorola’s set-top business to Aris for nearly $2.4 billion. With the sale to Motorola and the value of the patents, which it has used as a strategic asset to protect the Android ecosystem, Google seems to have fared better than you may think.)

Google investors are happy with the news, sending the shares up in late trading. They’re up 2.6 percent, or $28.28, to $1,135.20 at 5:38 p.m. New York time.

Sources:
wsj
Android Police