Lenovo, the Chinese handset maker has announced a statement saying it has agreed to buy Google’s smartphone business: Motorola for $2.91 billion. Google paid $12.5 billion for Motorola inc. in 2012 with the majority of mobile patents, that Google keeps with itself.
Google says the sale is made for prioritizing their focus on smartphone software rather than devices. The purchase is highly likely to make a big boost on the Chinese handset maker’s international business, mainly the US which is dominated by Apple and Samsung.
In 2005, Lenovo muscled its way into what was then the world’s largest PC market by buying IBM’s personal computer division. It has powered its way up the rankings of the global smartphone industry primarily through sales on its home turf but has considered a U.S. foray of late.
“Using Motorola, just as Lenovo used the IBM ThinkPad brand, to gain quick credibility and access to desirable markets and build critical mass makes a lot of sense,” said Forrester Research analyst Frank Gillett.
“But Motorola has not been shooting the lights out with designs or sales volumes in smartphones. So the value is simply in brand recognition to achieve market recognition faster – and to expand the design and marketing team with talent experienced at U.S. and Western markets.”
The deal was later approved by authorities to transfer the rights to the Chinese company.