Google has decided to finally sell ‘Motorola’ to Lenovo for USD 2.91 billion. Investors had been calling Motorola a drain on Google’s Profits.
The Chinese technology giant ‘Lenovo’, would take Google’s financial headache from their hands soon enough. The search engine giant bought Motorola for USD 12.4 billion in 2012, a decision that many had condemned ever since.
This deal would put an end to Google reign as a handset maker, but it would also act as the first chapter of Lenovo surge in the smartphone industry and tablet markets. Lenovo has been reported to be extremely eager to grip the smartphone market, while keeping its existing relations with the businesses.
An analyst of Creative Strategies in the Silicon Valley, ‘Tim Bajarin’, sheds his opinion on this business deal:
“It is win-win,” He adds, “Google keeps the patents and the research group, and they keep partners off their back, while Lenovo gets what they need to get into the US smartphone market.”
Lenovo had also announced earlier that it is acquiring IBM’s low-end server business for US$ 2.3 billion, only after a week Lenovo is again in the News – this time for bigger and more expensive reason, buying Motorola from Google.
Both these decisions will give Lenovo a platform to compete in that sector with US giants Dell and Hewlett-Packard.
Other Strategy Analysts claim that Google’s Android system is used by more than 78.9% of all the smartphones sold throughout the world, in 2013.
Motorola may not rank among the top smartphone of the world but it does comprise of around 7% of the total US market, which can prove to be a firm enough foundation for a Chinese Brand, which is penetrating into a new product line and also expanding its business territories.