What We Know About the Motorola-Lenovo Deal (Updated)

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With the Lenovo-Motorola deal now official from all parties, we thought a quick recap of everything was in store. Since this move has clearly brought out plenty of your emotions, especially when it comes to thinking about your next smartphone purchase, we are sure you want answers. While we won’t have them all, and should know more tomorrow after Google’s earnings call, we do have plenty to share. 

Quick bullets:

  • Lenovo will pay “about” $2.91 billion for Motorola, including $1.41 billion will be paid at close, comprised of $660 million in cash and $750 million in Lenovo ordinary shares. The remaining $1.5 billion will be paid in the form of a 3-year promissory note.
  • Google is keeping a “vast majority” of Motorola’s patents to help “defend the entire Android ecosystem.”
  • Lenovo will receive a license to the patent portfolio that Google is keeping.
  • Lenovo will still receive over 2,000 patent assets, along with the Motorola Mobility brand and trademark portfolio.
  • Lenovo intends to keep Motorola’s “distinct brand identity.”
  • So what happens to the name “Motorola”? We don’t know just yet. With that said, after Lenovo bought IBM’s PC business, they certainly don’t call them “IBM Thinkpads” anymore. If you want a Thinkpad today, it’s a Lenovo Thinkpad.
  • Can a Lenovo “Moto X” or Lenovo “DROID ULTRA” carry weight with smartphone consumers in the U.S.? That’s what we are about to find out. They certainly know what they are doing on the PC side, having led the PC sales category for some time.
  • Lenovo is going to try to scale Motorola into a global player with their “experience in hardware” and “global reach.” As of right now, Motorola has its Moto X in North America, Brazil, and parts of Europe. It has the Moto G in a number of other countries, but the major global presence is not there.
  • As Page mentioned in his blog post, the deal has yet to be approved in the U.S. or China, and even if it does get approval, will take all sorts of time before that happens. Remember that Google announced plans to acquire Motorola in August of 2011, but that the deal wasn’t approved until the following May. For now, it is business as usual for Motorola and Google.
  • 2014 should still be exactly what you were hoping it would be with Motorola doing the next line-up of phones to follow the Moto X. Larry Page even said he is “very excited” about the smartphone lineup for this year.
  • MotoMaker – staying or going? After sitting down for an interview with Motorola execs at CES, I got the feeling that MotoMaker and customization is here to stay. Well, at least for now. Motorola more than likely already has their 2014 roadmap ironed out, which would include MotoMaker. Once this deal is finalized and they start thinking about 2015, anything goes.
  • Page said that this move will help Google to “drive innovation across the Android ecosystem, for the benefit of smartphone users everywhere.” Is it just me, or does that come across as, “We got rid of Motorola so other OEMs could stop worrying about us owning them and focus on making great Android handsets.”?

Updates: A conference call with Lenovo is apparently going on, Re/code has the play-by-play, some of which we have included below.

  • Dennis Woodside (maybe other members of the executive team) will be a part of management, at least for the transition.
  • Chicago HQ of Motorola will stick around for now.
  • There are no current plans to lay anyone off – Lenovo likes the talent that Motorola possesses.
  • Lenovo wouldn’t commit to the Texas Moto X plant, saying that it will evaluate to see what the most cost effective way to win the market is.
  • Lenovo thinks it is in prime position to soon sell 100 million smartphones.
  • Regina Dugan’s advanced research unit (electronic tattoo stuff) was not a part of the acquisition.
  • The Advanced Technology Group (including Project Ara) are staying with Google, as a part of the Android team.

At this point, I think I’m trying to remain calm and positive over the situation. Lenovo is a well recognized PC brand who is looking to acquire a well-recognized U.S. smartphone brand. Can those two mesh and create a smartphone arm that can compete with Samsung and Apple? I hope so. Is it better to have Lenovo behind you than Google? I’d argue that it’s probably not, though Lenovo is the real deal in terms of a tech company. It could have been worse. It could have been Huawei or ZTE or something.

I’d imagine that we’ll know a lot more tomorrow after Google’s Q4 earnings call.

After reading comments from all parties, are you feeling any better?



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