Google has sold its Motorola Mobility subsidiary to Lenovo for $2.91 billion, including the Motorola brand, some of its patent portfolio, and current and future Motorola mobile products. Although Google will keep its ownership of the majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures, the company will get out of a business that never helped it compete or make money and hurt its relationships with other Android phone manufacturers.
To Lenovo CEO Yang Yuanqing, Motorola is a “treasure,” and will be treated as such. “It’s our treasure,” Yang said during a conference call with reporters. “We plan to not only protect the Motorola brand, but make it stronger.” In China and emerging markets such as India and Russia, Lenovo will continue to sell its own branded phones. Lenovo will operate the Motorola brand in North America and Latin America, where it has an established footprint.
Google purchased Motorola Mobility for $12.5 billion in August 2011. Even though Motorola shipped the Moto X and Moto G under Google, the handset arm lost money for the company. Last quarter it reported a $248 million loss, less than -21 per cent of Motorola Mobile segment revenues, and in the year ago quarter showed a $192 million loss. On the positive side, Google did recover about $2.35 billion by selling Motorola’s set-top-box business to Arris Group in 2012.
Google also released its Q4 2013 earnings, reporting $16.86 billion in revenue, up 17 per cent compared to Q4 2012, and $3.38 billion in net income, up from $2.89 billion in Q4 2012. Most telling, it was revealed Motorola lost $384 million for Google during the quarter, showing the handset business continued to be a dagger in Google’s side. That makes for a loss totaling $1.25 billion from Motorola in 2013 alone.
Google beat analyst earnings on revenue, but missed slightly on net income. The stock has slightly risen in extended trading.
