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October 31, 2014

The Deal is Done: Lenovo Buys Motorola From Google

Only recently, Motorola Mobility's president, Rick Osterloh, noted that a deal was in the works between Google and Lenovo to buy Motorola Mobility. Osterloh also reportedly noted that the deal was nearly complete, and indeed, it was. New word less than a week later makes it clear that the deal was nearly done at the time, as it is now actually done. Lenovo and Google have officially completed a deal that would see Motorola Mobility safely into Lenovo's hands.

The deal was reportedly valued at $2.9 billion, and calls for Motorola Mobility to serve as a wholly-owned subsidiary organization with a Chicago headquarters and Osterloh to maintain his position as president. As for the issue of patents, which likely would have been the stickiest part of the operation, Google is retaining ownership, but Lenovo gets a license to use any patents it chooses. Several cross-licensing arrangements, meanwhile, will proceed to Lenovo's control.

Osterloh, meanwhile, seems particularly excited about the arrangement, possibly owing to the fact that Motorola Mobility will be exposed to a huge new market in very rapid fashion; Osterloh noted in an appearance that Lenovo has “a huge China business” as well as a substantial presence throughout both the Asia-Pacific regions and in Europe, so Motorola is about to proceed to a much larger stage than previously seen. This is a point confirmed by Lenovo's CEO Yang Yuanqing, who issued a statement about the deal detailing the importance of building “...a strong number three and a credible challenger to the top two in smartphones.”

Indeed, with Motorola Mobility now in Lenovo's hands, the chances of Lenovo building a powerhouse smartphone of the kind that could successfully take on Apple's iPhone and Samsung's Galaxy lineup is better than ever. Motorola's been in the mobile game for quite some time now, so the company has plenty of background in terms of mobile device construction. Indeed, so too does Lenovo, but bringing the two together in such a fashion might well be the big boost that both needed to really put out something impressive. Naturally, there's no word as yet as to what the companies may end up doing as a result, but when there's a lot of fertile ground on hand, it's pretty safe to say that something will grow. While perhaps the company has a bit too grandiose of an ambition—posing a significant challenge to major entrenched figures like Apple and Samsung in the mobile device market is no small matter—the idea is certainly grand enough that even if this shot at the moon doesn't take, it's likely to still hit a star. It's easy to remember Microsoft's move on the market with Windows Phone, and wonder how Lenovo could pull off what even Microsoft couldn't. But with the mobile device market in rapid flux and some even beginning to wonder if wearable devices might not ultimately supplant smartphones, it could well be anyone's game anytime now.

It will be interesting, over the course of the next several months to come, to find out just what that particular something is. The combination of Lenovo and Motorola Mobility could be a very big combination indeed, but only time will tell just what form the combined efforts of these two major names takes on in the market.

Edited by Maurice Nagle

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