Lenovo Buys Motorola from Google: What Does it Mean?

Lenovo has announced a $2.91 billion deal to acquire Motorola Mobility from Google. Motorola's handset business was sold to Google in 2012 for $12.5 billion, but hasn't made any money for the search giant.

Google said that it purchased Motorola Mobility for its patents, most of which aren't included in the sale to Lenovo. Instead, Lenovo will receive a license to the portfolio of patents and other intellectual property. On the surface, Lenovo getting Motorola for less than a quarter of what Google paid for it sounds like a steal (after all, are those patents really worth $9 billion?), but this Chinese company is after more than just a bargain. Lenovo is plotting world domination – at least in terms of computers and electronics. Less than a week ago, Lenovo acquired IBM's x86 server business.

Lenovo's new product onslaught at CES 2014 demonstrated that the company wants to leave no market segment untouched. Smartphones is still an area that the company is just dabbling in, and only in limited markets. We saw a handful of Lenovo smartphones running Android at CES, but none of them were position for the North American market.

Yang Yuanqing, chairman and CEO of Lenovo, said that the company would be making a big push into the US and western European markets in 2015. With Samsung virtually uncontested in the Android market, Lenovo sees an opportunity here to steal a piece of the pie, especially in the western markets where consumers see the phone choices simply as "iPhone" or "Galaxy."

“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. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” said Yang Yuanqing in a prepared statement.

This sale dashes any hopes of there being a true Google-made phone from Mountain View. While Nexus devices are a collaboration between hardware partners such as Samsung and LG, with Google providing the software support, the sale of Motorola Mobility to Lenovo means that we'll probably never see a phone that's designed top to bottom by Google.

This could also mean an end to devices like the Moto X and Moto G, which weren't quite Nexus devices, but shared a lot of design philosophy in creating a pure Google experience. Moto X and Moto G owners enjoyed a near-stock build of Android, which meant timely updates to the latest updates of the mobile operating system.

With Motorola Mobility in its stables, Lenovo instantly gains the #3 position in the U.S. among Android smartphone manufacturers, behind Samsung and HTC. According to Opera Mediaworks, Samsung has 58.45% of Android device marketshare, with HTC at 10.88% and Motorola at 8.7%.

While a long ways away from Samsung's lead, Motorola's relationship with carriers, particularly with its DROID brand, will help Lenovo jump into the U.S. market. Given how committed Lenovo has been to serving all the segments of the computer market, don't be surprised to see it put forth a similar effort in the coming years. After all, who wouldn't want a ThinkPad phone?

Relax, this is just a case for the Nexus 5 (photo (Image credit: Alex Davies))

Check out all our coverage on Lenovo phones from CES 2014:

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Marcus Yam
Marcus Yam served as Tom's Hardware News Director during 2008-2014. He entered tech media in the late 90s and fondly remembers the days when an overclocked Celeron 300A and Voodoo2 SLI comprised a gaming rig with the ultimate street cred.
  • vaughn2k
    I have a P770 from Lenovo, and yes, the price is also a steal!
  • gamebrigada
    Sigh... I guess my droid maxx was the best phone ever made then... Doubt Lenovo will take Motorola in the direction its been going. Yes its not the best phone specs wise, but man through all the tests I've taken it, I chose it every time.
  • vern72
    First no more Nexus and now this? We're going to get gouged on the price of smartphones in the near future!
  • ddpruitt
    On the surface, Lenovo getting Motorola for less than a quarter of what Google paid for it sounds like a steal (after all, are those patents really worth $9 billion?)

    A) They're only buying the Handset business, the set top business for around $2.5 billion
    B) Google always said they were in it for the patents and didn't want hardware
    C) Google is going to license the patents and make much more than what they paid
    D) Samsung lost a $1 trillion dollar lawsuit (obviously it's still going through the courts but it's expensive

    So all in all I'd say Google's the one who got the bargain.
  • Jgriff
    I'd like to see samsung knocked down a notch in any which way. Recently I've got nothing but sub par quality products from them, had to return 3 led tvs because they made annoying buzzing sounds...wtf is that? Using crappy ass parts in an expensive tv makes no sense. I've NEVER had that happen with sony or vizio or even some of the cheaper no name branded tvs I've bought. I'll never buy another samsung product again after that.
  • dragonsqrrl
    I hope it means we'll continue to see timely Android updates for the Moto X and Moto G.
  • ff6shadow
    Lenovo as a brand has surpassed all my expectations. They're the one vendor when it comes to laptops, that I would recommend to anyone. They just make fantastic stuff. Super durable. Excellent designs. Thinkpad is just amazing. I will absolutely buy a thinkpad phone in 2015 when it's available.
  • Caffeinecarl
    It means that I won't be buying Motorola ever again! Say NO to cheap Chinese garbage!
  • milktea
    It means that I won't be buying Motorola ever again! Say NO to cheap Chinese garbage!
    Lenovo's quality is actually pretty good, especially their business laptops. Not all Made in China are garbage. A lot of high quality products are made in China, iphone for example. And if you're into the audio, FiiO is actually is a real deal. It really surprises many other high-end brands.
  • Hammerxc
    Dang it!!! I recently got a Moto X on Verizon and absolutely love it. I've had a Nexus 4 on Straight Talk (AT&T service) for over a year and was surprised how quickly the Moto X has won me over. While I carry both (work/home thing) I find myself reaching for an using the Moto X almost exclusively. My experience with the Moto X had me anxious to see what Motorola would be releasing next (instead of anxious for the newest Nexus). Now I'm worried the Moto X thought line may be ended just after it got started. Heck, I might now buy a Moto X unlocked to replace my Nexus 4 on StraighTalk. No, I'm not kidding, I live the Moto X. It's form factor fits the hand like it was made for it. Never slips, never drops, never feels awkward when talking or typing. It's only got a dual core CPU where the Nexus 4 has a quad, and it's VERY responsive. Anyway, RIP Google owned Motorola (tear falls).