Why Android, Samsung are Real Winners in Google's Motorola/Lenovo Deal
Google agreed to a $2.9m sale of its Motorola Mobility unit to Lenovo. While the deal appears to make a lot of sense for both companies, Samsung and the Android OS in general are also sure to benefit. Here's why.
Thu, January 30, 2014
The deal may have been unexpected, but it actually makes clear sense for all of the parties involved. Lenovo gets a recognized and respected brand in the U.S. market, along with a skilled engineering team, for a relatively reasonable price. Google gets rid of a conflict with its Android partners that's been plaguing it since it first acquired Motorola Mobility in 2011, and it holds onto some valuable patents. Finally, Motorola Mobility (presumably) gets the attention it deserves -- and perhaps didn't get from Google -- as Lenovo breathes new life into the brand.
Sure, Google's "losing" some cash in the mix -- it purchased Motorola Mobility for more than four times as much scratch ($12.5m) as Lenovo intends to pay for it ($2.9m.) But Google did sell off some parts right after it made the purchase, recouping some of the price, and it certainly benefited from a number of intangibles in addition to the patents it will retain.
On the surface, the deal appears to be a no-brainer for all involved. But Samsung, by far the leading Android OEM, and the Android OS itself, are the real winners here, because there are still a whole lot of unanswered questions for Lenovo and Motorola.
For example, just how far will the Motorola brand take Lenovo in the North American market? By the numbers, the acquisition would make Lenovo the third largest smartphone vendor in the world, according to Strategy Analytics. Will that be enough overtime to compete with Samsung, HTC and other major OEMS? What will Lenovo do with the brand? Perhaps most importantly, will it continue offering relatively "pure" versions of Android, as Motorola has or will it got the route of Samsung, HTC and others with heavy Android customization? In other words, it's too early to tell just what this purchase will mean to Lenovo.
There are fewer questions for Samsung and Android, though.
Samsung current owns the Android market; more than 60 percent of all Android devices are made by Samsung, according to research firm Localytics. Android rules the smartphone; the OS accounted for 8 in 10 smartphones shipped worldwide in 2013, according to Strategy Analytics.
Samsung and Google are the two biggest players in the smartphone game, and a couple recent moves suggest the partnership between the two companies may be getting stronger. They just signed a 10-year patent licensing deal, which is sure to bring them even closer together. Samsung is also rumored to have agreed to cut back on the UI tweaks it makes in its Android customization, to make for a cleaner Android experience, at Google's request. Now Google has eliminated its threat to Samsung, and all the other Android OEMs, by selling its hardware business.