In an unexpected move, Lenovo announced Wednesday that it would purchase the Motorola Mobility handset business from Google for $2.91 billion. Google will retain ownership of most of the Motorola Mobility patent portfolio, however, which it will license to Lenovo.
"The acquisition of such an iconic brand, innovative product portfolio, and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones," Lenovo Chairman and CEO Yang Yuanqing said in a prepared statement. "Lenovo has a proven track record of successfully embracing and strengthening great brands, as we did with IBM's Think brand, and smoothly and efficiently integrating companies around the world. I am confident we will be successful."
Google certainly wasn't. The firm purchased Motorola Mobility for $12.5 billion in 2012 after announcing its intention to purchase the struggling firm in 2011. But Motorola continued to lose money under Google's aegis, despite the introduction of well-designed devices like the Moto X and Moto G. It lost $248 million in the most recent quarter alone.
At the time of its purchase of Motorola Mobility, Google insisted that the purchase was not just about Motorola's extensive mobile patent portfolio, though it's very clear now that wasn't the case. The announcement notes that Google will retain "the vast majority of the Motorola Mobility patent portfolio," though Lenovo is purchasing more than 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio.
Google says it will use these patents to "continue protecting the Android ecosystem." But it's pretty clear that these patents aren't worth $9.59 billion, the difference between the price Google paid for Motorola Mobility and the price it sold it for.
As for Lenovo, the firm was independently expanding its Android-based handset business from China into international markets and planned to enter the United States this year. But Lenovo was hoping to make a big purchase to jumpstart that process and apparently tried to purchase BlackBerry last year.