Motorola Mobility is being sold to Chinese technology giant Lenovo for $2.91 billion, just a few years after Google purchased the mobile handset company for $12.5 billion in 2011. However, one major discrepancy can account for the major price difference — Google is keeping a large percentage of Motorola Mobility’s patent portfolio.
Motorola Mobility CEO Larry Woodside said in a blog post that Google would retain ownership of a “vast majority” of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. He did say, however, that Google would license these patents for Lenovo’s use.
“As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property,” Woodside said. “Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio.”
In a blog post of his own, Google CEO Larry Page noted the worth of the patents, writing that since acquiring the intellectual property, “Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners.” He also said that the patents are important for Google to “continue to use to defend the entire Android ecosystem.”
Upon its original purchase of the company, Google valued the Motorola patents at roughly $5.5 billion. And although the raw math does not work in Google’s favor, indicating a net loss on the Motorola purchase, TechCrunch notes that the value to Google in this case may be more than monetary.
Through helping to resurrect Motorola’s brand, Google has placed into the market another major mobile manufacturer carrying the Android operating system. And now, Motorola is backed by Lenovo, which turned a flailing IBM into the single largest computer retailer in the world.
In his post, Woodside acknowledged that increased Motorola value, saying, “Since being acquired by Google in 2012, Motorola has transformed itself, focusing on solving real consumer problems and providing amazing experiences built on a foundation of pure Android. The result has been Moto X, Moto G, and a reinvigorated Droid line. Together, these devices have won over consumers and critics alike and helped re-establish the Motorola brand around the world.”
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