I kind of wonder if it's coincidental that this happened around the time of agreements with Samsung relating to patents and (apparently) Samsung sticking to something nearer to stock Android: Google simultaneously makes nice with a hardware partner and stops competing with them.
Also, another angle on this sale: one of Motorola-under-Google's most notable achievements was making a very nice low-end handset, the G. Lenovo, as a Chinese company, is well positioned to sell a lot of phones in China if they can make some devices that are well priced for the market (unsubsidized phone sales, lots of competition, big range of incomes). I don't know if they'll actually choose to focus there--seems like margins would have to be low competing with folks like Xiaomi. But if they do go for the low end, they have some very relevant know-how.
Yes, if anything that $50 Motorola smartphone is all the more likely to happen now - and have even bigger success, especially in China, thanks to Lenovo's advertising power and brand there (even if they don't stick a Lenovo label on them).
Lenovo isn't stupid, if they're selling them in China they'll attach a Lenovo label. We may end up in a situation where all the phones they sell in China have one label and a different one, but the same designs in the US. Either that or they'll just stick the Lenovo logo on everything, Motorolla isn't exactly a top-tier brand anymore.
Wow are you out of touch. The cheapest smart phones are already in the $75 range an below. Xiaomi, micromax, and others have already committed to have there entry level phones be $50 this year.
These are 3.5" lcd full capacitive touch, 256mb Ram, 8GB, 2mp can, and usually some dual core A7 from rockchip or mediatek at 1Ghz. All for under $75.
There is no reason to think that they can't keep cutting prices.
Most the non-chinese phones are whiteboxed designs with every country having a company brand them locally.
Yes, of course. This was a major bone of contention between the two, and obviously has a major role in this decision.
As Moto has been losing money consistently, and is seeing its sales numbers continue to shrink, despite what Anand says about the feel of their new phones, this is something Google needed to do.
It also allows them to push off the need to write down almost the entire $12.5 billion purchase. Unfortunately for them, the patent portfolio hasn't proven to have much value either.
Best I've come up with is something more like $5.24 billion in the hole.
-12.5 purchase price +2.9 moto cash on hand +1.0 moto tax credits +2.35 sold home to arris +.075 sold assembly plants to flextronics +2.91 sold mobility to lenovo -1.97 moto operating losses over 2 years -5.24 net
Hmm, not sure I have any strong feelings against this a long as it pans out at least as well as the IBM PC acquisition... I see two short term positives for sure:
1) it solves the whole dilemma of Google competing against it's OEMs (it would never end otherwise), we'll see how Moto does with updates now tho...
2) $5 says the next Nexus is a Motonovo device, which could be really interesting IMO... They're basically next in line anyway (HTC had one, and the G1, Samsung had two and so did LG), unless they go back to HTC or Sony. A Moto Nexus could never happen as long as Moto was Google's tho, too many people would cry about it regardless of how inconsequential.
I'm still hoping for a Sony Nexus one last time (if Google decides to kill Nexus brand after that).
I think it would be too early for a Lenovo/Motorola Nexus, since it would basically have to be Motorola anyway. If they would've planned for a Motorola Nexus, it would've happened already since last year. So it would be all-Motorola, and won't have anything to do with Lenovo.
What do you think this means in terms of Android updates for the Moto X and Moto G? I'm wondering if this could have a negative impact on the swift updates we've seen thus far.
No, Lenovo's acquisition of IBM's Laptop department hasn't gone well, at least for the consumers. Comparing X60 to X200 to X230/X240 shows a trend of decreasing quality, decreasing costs, removing features.
Also, since China is as eager to spy on us as the States, this could mean that the next Motorola phones will not only be backdoored by the U.S. but also Chine.
My thoughts exactly. I came here to post that I used to own a T420. I bought a ThinkPad Yoga and returned it because the build quality was awful. I've played with a friend's T440 and the build quality is also similarly disgusting. Lenovo HAS ruined the ThinkPad brand. They've turned it into just another cheap, low-margin, cost-cutting laptop. ThinkPads used to be about quality without compromise.
The fact remains however that you can still spend the money and get a high end, well built Thinkpad notebook, with a carbon body solid as a rock. In addition to that, when I compare Lenovo Thinkpad notebooks to compatible HP G series, Acer E-Series and low end ASUS K series, well Lenovo takes the cake by a wide margin in my personal opinion. They have widened the brand, yes.... but margins are not great and competition is abundant in the OEM space. I still think the notebooks are top knotch, just not at the bottom of the barrel price points. Still, those cheap units are great compared to the cheapos that other companies make.
You're comparing the wrong products to what Lenovo's marketing the ThinkPad too. Relatively speaking, IBM and early Lenovo ThinkPads have much better design and build quality. Also, ThinkPads are competing with HP EliteBooks and Dell Precisions and nothing from ASUS, Acer, etc. The current ThinkPad is no longer a business notebook. It is a consumer notebook.
I wonder how that would translate to Motorola phones. Will the quality of Motorola phones gradually decrease like how the ThinkPad did or will they get better? I hope they get better.
My company as well has phased out ThinkPads. Now, any person being upgraded or getting a new notebook does not have an option to get a ThinkPad anymore. We can only choose from EliteBooks and Precisions.
Yes, but as of X230, they no longer manufacture the superior thinkpad keyboards, now they're all chiclet style keyboards. X220 is one of the last acceptable X series thinkpad unfortunately. And whilst MrSpadge makes a good point, I see a lot of asus's laptops nowadays that are quite sturdy and feel great, but are not business oriented. It's not just the materials, it's the design. Thinkpads are easy to disassemble and repair, but the latest ones don't even come with a removable battery. They could have powerful docking stations with thunderbolt and whatnot, but they are just not doing any of that stuff. Whilst you do have to pay for the design tradeoffs on every device you manufacture, you shouldn't skimp on the design process- a well designed device, chassis, motherboard will be in many cases reusable and will greatly increase the value of the laptop in the market. You can't just make a magnesium alloy chassis and slap a thinkpad badge on it and hope for money to flow in. This is the one thing Apple has gotten right and most other manufacturers have not.
Lenovo didn't ruin the ThinkPad line overnight. It was gradual. First they let design stagnate for a while but definitely lowered the build and quality control. Next they started lowering the quality of the design: less rugged (ie. changing build material, putting holes in the frame, etc.), less fixable onsite and removing business features. Lenovo also stopped providing the MIL-STD test results. If you're familiar with MIL-STD, then you should know that it's a useless rating without the test results.
The ThinkPad --20 revision (ie. X220, T420, T520, etc.) were where the design and build quality was just tolerable from the business user/IT point of view. The --30 model year was the last my company issued to the employees.
For everyone complaining about Thinkpads not being what they used to be: keep in mind that continuing as they always did was not an option for IBM. They simply didn't make enough profit like this (or was it a profit at all?), as much as some people loved them. So by taking over and slowly transforming things Lenovo gave us a "Thinkpad-like" option at all - and I suppose they're moving far units now than back then.
Which doesn't mean they should completely forget about build quality, though.
It's unfortunate that in order to make the ThinkPad profitable, both design and build quality must be lowered significantly.
That's the problem though. That might mean the design and build quality of Motorola phones will also be lowered. The X220 was the last acceptable but still inferior ThinkPad I own. I wonder if I'll stop buying Motorola phones in the future.
Yet somehow other companies, like Apple sell premium products at premium prices and do quite well. Ditto for HP workstation laptops. I don't think much of a lot of HP's products but their workstation laptops are excellent. Lenovo simply decide to go to a lower level of quality on all of their products.
Absolutely right. Lenovo quality is far from IBM Thinkpad quality. prices are far lower but they cut everything to get the price down. Quality of components and quality control of manufacturing.
I really liked the Moto X. I didn't think it was a worth it to upgrade from my Nexus 4, though. We'll see if Motonovo can be as competitive this next year.
I'm interested to see if Lenovo keeps manufacturing in Texas.
What a loss?! While not giving much thought about why they would sell, they are not really a hardware company and it's a separate unit so it makes sense at some point, but for $3 billion well then Lenovo at least should be able to make something of it, but Google bought it for 12.5 billion. Selling other business from that unit for what? Another 2.35 billion US. Now Lenovo gets the phone-business for just 660M US up front. Well I guess they at least will take the European market serious now, Motorola/Google didn't really, while at the same time taking over the remnant of the former major US-player and a strong brand.
Since Nokia's departure with their new direction 2011, that effectively makes the business only in the hands of the Koreans, Chinese, Taiwanese and Japanese now. The companies in Europe and US gave up as always. If not by themselves then with help by North American executives. High tech seems not to be anything for us today, and inventing much of the consumer goods, refrigerators, mobile phones, semiconductors as well as the science doesn't matter if you loose the drive.
"The companies in Europe and US gave up as always. If not by themselves then with help by North American executives."
I suppose that's the reason why the likes of Samsung and ASUS grow big, although it remains to be seen with Apple trying to break the cycle by starting to manufacture in the US.
It's a global economy, get used to it, yada yada... However, it's worth keeping in mind that while the job of design and integration that these OEMs carry out is important, what's actually going into the devices is probably more important still... A lot of that is still designed by US companies (Qualcomm, NV, Intel, etc). Not all mind you, stuff like display tech is strictly up to the likes of LG, Samsung, Sharp, etc.
It's a good company for Lenovo to buy, loss of competency and industrial leadership is more worrying on a nation level however I think Lenovo would rather contribute here so it's more of a leadership and ownership issue. As everything can't be managed by people overseas, but here in Sweden we still do some handset development at Sony as well as some at the offices of the mainland Chinese vendors. Finland should kick out the remnants of Microsoft's handset business as quick as possible though, as they quickly removed any potential to develop it even before actually buying the business. So it leaves room for other businesses. ST - Ericsson cooperation fell through though so no SoC's from us anymore, but Ericsson still does modems, and the modems from the Finns/Japanese ended up at Broadcom I think. As long as it's not totally erased there's at least some potential left.
While much of the new high-tech technologies ended up in Asia and semi-new players it's amazingly to a large extent in the high-cost OECD-countries. While we can't even make lead-batteries in Sweden any more let alone lithium cells It's Korea and Japan that's leading there, and the Taiwanese and Chinese battery makers mostly use their cells. But that only makes it more sad when a country truly gives up on something they are good at. But it's not really the case here, Motorola went down long before a small resurgence with android based devices. At least Sweden and Finland designs and develops, even does some of the assembly and manufacturing of base-stations while that business is none existent in the US and North America where every player and most of the technology has fallen and been forgotten while law-makers yell about excellent Chinese equipment that they don't want to buy even though there is no US-designed stuff any more.
European and Japanese players have removed themselves from much of the consumer electronics businesses they built though, on the Display side it's only Sharp and Panasonic that actually develops and manufacture large panels any more in Japan or has any financial interest in manufacturing/buying them. That means that companies like Hitachi, Pioneer, and Fujitsu fully stopped making and selling TV's exiting the market all together with the changes, those are to a large extent based on domestic problems though.
Motorola and Nortel where giant's in their industries at some point and large conglomerates, it doesn't take that much to erase most of the business and divide it up in half a dozen companies.
Semiconductor design and Semiconductor manufacturing still is within the grasp of the Europeans, Japanese and Americans though. Taiwan is mostly a merchant player, while Korea's Samsung has one of their most advanced merchant fab in Texas. Common platform partners has fabs in US, Japan, Europe and other parts of Asia. But it often depends on companies – at least in a regional sense – that can't afford to loose their direction. Qimonda just dropped of the earth, and Elpida got bought by Micron because they couldn't finance themselves for example. There is both pretty competitive while in a semi-related field by another player it's not really competitive any more, so it depends greatly on industry and respective market-segment. As always. Some segments have other emerging players, some don't. An missed investment and trusting others to supply you can spell the end of a companies entire field.
Didn't mention Mitsubishi's exit or Toshiba's exit from making LCD-panels there. Now Sony has finally announced that they are withdrawing (planning to) from the TV-business too. As expected. Well at least if they can get someone to take over the new company that will run the TV business.
Philips did the same here in Europe, first divested itself from joint ownership of a LG LCD-fab and later gave up their TV-business to TPV that already ran and operated the company selling philips-branded monitors as well as manufactured most units for them. Though they still had some ownership that they gave up now in January. Those remaining is those that still manufactures panels pretty much.
Samsung was about to ship Tizen smartphones to compete with Android phones at the low end of the market.
Samsung signed a pact where 1. They both exchange rights to their respective patents. 2. Samsung stops Tizen development and stays with Android 3. Google drops hardware development - selling off Motorola and ending Nexus.
Google did all of this to prevent Samsung - the dominant and only profitable Android hardware maker - from leaving the Android camp. It is a deal between two devils.
Samsung was pressure by Apple into coming up with Tizen to increase its own profits. Now it gets to keep a higher share of its profits by not having to pay Google for an Android license.
Apple's next move? To share the profits from Apple Ads with its consumers through their iTunes accounts. This would enormously incentivize consumers to click on Apple's ads, while ignoring Google's Ads. Apple makes profit from hardware and thus doesn't need the extra pennies from Ads. Google on the other hand copy this since this would enormously cause it to lose profit.
"Samsung was pressure by Apple into coming up with Tizen to increase its own profits. Now it gets to keep a higher share of its profits by not having to pay Google for an Android license."
Samsung (nor anyone else) does not have to pay Google a license for Android...
Wrong. All OEM'S who use Android with Google services pay a licensing fee. Google has sued companies who didn't do so. There is very little open source in Androids claim of open source. It fails on almost all the standard definitions of open source. But the rubes still lap it up.
Everything jameskatt said is wrong and pretty silly. Google does not care, at all, about Tizen. The idea is laughable. Apple isn't Google. Google is an ad company. iAd is a minor sideline for Apple. There is not a lot of profit there and why you think they have any reason to share revenue with customers is beyond me.
I’m sure Samsung loves getting pushed around like this. Samsung doesn’t have a replacement for Google Maps, for example, so their backs are to the wall on this — and from what I’ve heard from a little birdie, Maps is one of the services Google is using to get Samsung to fall in line. It’s not really much of a negotiation — it’s Google telling Samsung to stick to near-default Android or they won’t license Maps and other Google services.
From the frying pan into the fire. Cheap plastic construction. Low quality screen. Horrible Touchwiz. Features that don't work. Ugh. Even a lot of Android fans are disgusted with the S 4.
Agreed, although the build quality is not an issue for case users most of the time. Touchwiz makes the fastest phones seem slow.
I don't like the variance in features. If I had to pick a phone today, it would be between the HTC One for the front speakers, the LG G2 for its incredible battery life.. but I'd probably end up going with the S4 so I could have 80gb of storage space. I want my phone to replace an iPod touch.
My IT department stopped issuing ThinkPads last year because the ThinkPads just couldn't cut it anymore. At least from my company's point of view, the ThinkPad brand has certainly been ruined.
That's a 10 billion straight-up loss for Google in less than 2 years by my calculations. Didn't they pay 13 billion or so, to aquire Motorola mobility in 2012?
Considering they got Moto's patents, I don't think it's a loss at all. They just got rid of a hardware division they likely didn't want to have in the first place.
Those patents are not nearly worth what Google thought they were worth at the time. Andy Rubin was the major advocate for the purchase and notice that he no longer holds a high level executive position in the company.
First, the courts have ruled that standards essential patents such as those held by Moto cannot be used as a legal weapon against Google's competitors as Google assumed they could.
Microsoft was even awarded a minor damages amount for Moto breaking it's pledge to license their standards essential patents in a FRAND (Fair, Reasonable And Non Discriminatory) manner.
More seriously, the US threatened antitrust action against Google for their abuse of standards essential patents, which Google only avoided by immediately pledging to never abuse them in any current or future legal case.
Even more seriously, regulators in Europe have not backed down on their own antitrust case over Google/Moto's misuse of standards essential patents and the standard fine in the EU is ten percent of the guilty companies profits.
Those patents are not only not worth what Google thought they were worth, their misuse has opened up Google to a massive fine. and ongoing antitrust action.
They also sold Motorola's cable set-top box division to Arris for 2.3 million, so that helped as well.
Google is also keeping the Advanced Technology division, so when everything is all said and done, it's not really as bad of a deal as it may look on the surface.
"Motorola had ~$3B in cash when acquired. Google previously sold their set-top box unit for $2.35B and realized about $1.7B in tax benefits from previous losses. However since acquiring it has taken $1.038B in losses, which is $0.67B post-tax. There will be another write down for the lost goodwill less the value of the remaining IP that should be worth very approximately $1B. So including the $3B from Lenovo, they recouped approximately $10.4B of the initial $12.5B purchase price."
So $2 billion loss, and what they got out of it is access to all Samsung's patents and all the new ones over the next 2 years, and for them to follow Google's vision for Android. I think Google came up on top here.
I agree. Most people are just assuming the sale of Motorola Mobility resulted in a big loss to Google. It's completely the opposite. The deferred tax benefits realized from the operating losses and write-offs of assets will more than compensate for the investment loss incorrectly assumed by the readers.
Yes, Thanks for that. I knew Google wouldn't just throw money away for no reason. Still I'm leery about getting a Motorola X now due to updates. I can't imagine they'll keep the updates going..
@Krysto: "So $2 billion loss, and what they got out of it is access to all Samsung's patents"
On patents of Motorola that Google thinks are worth $5B, so they are $3B ahead!. Good move by Google and great move with Lenovo who an now play well in China with the Moto brand which is very strong and is useful in the Asian market as well. Plus with good distribution, Lenovo will be able to sell the Moto-X and Moto-G phones way better than Google ever did.
from the blog post: "Google will retain the vast majority of Motorola’s patents".
This is the real reason why Google purchased Motorola. The hardware assets are not what they wanted, this Lenovo deal makes perfect sense for them.
Not so sure about us, but then I stopped buying Androids because they killed the value of GPS navigation in the Maps7 update. My main reason to use Android is gone, so it could just vanish. My next phone will anything other than Android.
Well this puts me in front of an awkward choice. I gave the chinese a chance and am quite happy with my extremely low budget dual sim Lenovo A820 that I've been using for about 6 months now (previously I had an HTC Tattoo and a Samsung i9000). And I've seen a number of other Lenovo phones all in the 130-230 USD range (price includes worldwide shipping, etc.) - low enough so I don't care too much if I drop it, fast enough with the MTK65xx SOC. Due to the Chinese OEMs not being very fond on sharing their source code (FAEA and Oppo aside) due to MediaTek license complications I decided my next phone would be a Motorola (looking in the direction of the Moto G) so I can have better software support. I know Lenovo should be able to put a good use of Motorola and finally start selling good quality budget phones in the EU or the US. They can make good quality hardware (this budget A820 has a metal frame inside and doesn't twist or break easily and I've dropped it more than 10 times already by accident from height ranging 1-1.6m - the highest drop being on a cement floor in my parking lot and not a major scratch) but they don't use the best hardware (no Gorilla glass or Dragon glass) ... and they tend to bloat their devices with a ton of apps. So I got mixed feelings about this acquisition - it removes my next choice of OEM
But don't underestimate Lenovo - reports say they are #2 on the Chinese smartphone market right behind Samsung which if true is really big.
I'd be interested to read an Anandtech article on Chinese phones and comparison with the big Koreans (Samsung, LG) as there are tons of Chinese brands out there - to name a few: Lenovo, Xiaomi, Oppo, Meizu, Jiayu (low scale), Freelander (an OEM for some of the other brands), etc. etc.
Indeed. But due to the low cost of the moto g I've seen it compared to some of the more feature rich and expensive mediatek powered phones. If Moto G was available here 6 months ago it would have been the obvious choice. I sincerely hope Lenovo will make proper phones using Motorola's know how and start using proper parts like Snapdragon instead of MediaTek. But I've seen for myself their phones have good quality for their price. ( I've played around with a820, s750, p780 and will be checking a850 and s820 in a couple of weeks most likely.) Also since a820 costs between 20 and 25 % of the price of a galaxy s 4 people around here ordered lots. I've imported 5 for be and my friends and I've seen 5 co workers but them (multiple times each for friends and family)
Lenovo makes cheap, lower quality devices which anyone who owned the previous line of IBM Thinkpads can attest to. Google got raped on this deal and their shareholders should be screaming to high heaven. But since Google is an ad company their profits from ads paper over this debacle resulting from the idiotic purchase of Motorola for almost 13 billion dollars. Google never had any intention of keeping Motorola for manufacturing. Ask anyone who works there, this was obvious to them from day one. They thought the patents would help them fight lawsuits but not only have the patents been worthless they have lost every single court case after spending millions on lawyers. The word is serial copier Andy Rubin was booted from his position because he strongly supported buying Motorola but also because he exposed Google and their partners to massive litigation by copying so much of Android.
Didn't Microsoft basically give windows mobile away for a while? And the vendors in turn made crape hardware. Or at best they will just follow Apple and never innovate on their own.
Interesting and insightful analysis. Good to see AT stepping out a little with some bold predictions of future markets being created.
It's hard to believe that the mobile market is maturing already, but it does look like everyone is nervously looking over their shoulders and wondering what to do when the growth stops.
It looks like Google is making it clear that their response is to bail out on smartphones...
.... Following that logic, Nexus will be the next to get dumped overboard.
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twotwotwo - Wednesday, January 29, 2014 - link
I kind of wonder if it's coincidental that this happened around the time of agreements with Samsung relating to patents and (apparently) Samsung sticking to something nearer to stock Android: Google simultaneously makes nice with a hardware partner and stops competing with them.Also, another angle on this sale: one of Motorola-under-Google's most notable achievements was making a very nice low-end handset, the G. Lenovo, as a Chinese company, is well positioned to sell a lot of phones in China if they can make some devices that are well priced for the market (unsubsidized phone sales, lots of competition, big range of incomes). I don't know if they'll actually choose to focus there--seems like margins would have to be low competing with folks like Xiaomi. But if they do go for the low end, they have some very relevant know-how.
skiboysteve - Wednesday, January 29, 2014 - link
Great pointsKrysto - Thursday, January 30, 2014 - link
Yes, if anything that $50 Motorola smartphone is all the more likely to happen now - and have even bigger success, especially in China, thanks to Lenovo's advertising power and brand there (even if they don't stick a Lenovo label on them).Flunk - Thursday, January 30, 2014 - link
Lenovo isn't stupid, if they're selling them in China they'll attach a Lenovo label. We may end up in a situation where all the phones they sell in China have one label and a different one, but the same designs in the US. Either that or they'll just stick the Lenovo logo on everything, Motorolla isn't exactly a top-tier brand anymore.darwinosx - Thursday, January 30, 2014 - link
A $50 smartphone will not happen anytime soon. Not here and not in China. Why anyone takes that seriously is beyond me.errorr - Thursday, January 30, 2014 - link
Wow are you out of touch. The cheapest smart phones are already in the $75 range an below. Xiaomi, micromax, and others have already committed to have there entry level phones be $50 this year.These are 3.5" lcd full capacitive touch, 256mb Ram, 8GB, 2mp can, and usually some dual core A7 from rockchip or mediatek at 1Ghz. All for under $75.
There is no reason to think that they can't keep cutting prices.
Most the non-chinese phones are whiteboxed designs with every country having a company brand them locally.
melgross - Thursday, January 30, 2014 - link
Yes, of course. This was a major bone of contention between the two, and obviously has a major role in this decision.As Moto has been losing money consistently, and is seeing its sales numbers continue to shrink, despite what Anand says about the feel of their new phones, this is something Google needed to do.
It also allows them to push off the need to write down almost the entire $12.5 billion purchase. Unfortunately for them, the patent portfolio hasn't proven to have much value either.
darwinosx - Thursday, January 30, 2014 - link
Uh no..not sure where you are getting your math from but they are at least 6 billion in the hole.errorr - Thursday, January 30, 2014 - link
They are down around $3B and keep the patents.Moto had over $3B in cash when acquired and then they sold some ancillary businesses like the set top box division for a tidy sum.
icrf - Friday, January 31, 2014 - link
Best I've come up with is something more like $5.24 billion in the hole.-12.5 purchase price
+2.9 moto cash on hand
+1.0 moto tax credits
+2.35 sold home to arris
+.075 sold assembly plants to flextronics
+2.91 sold mobility to lenovo
-1.97 moto operating losses over 2 years
-5.24 net
darwinosx - Thursday, January 30, 2014 - link
This has zero to do with Samsung. Google has been trying to get Motorola in shape for someone to buy them since day one.Impulses - Wednesday, January 29, 2014 - link
Hmm, not sure I have any strong feelings against this a long as it pans out at least as well as the IBM PC acquisition... I see two short term positives for sure:1) it solves the whole dilemma of Google competing against it's OEMs (it would never end otherwise), we'll see how Moto does with updates now tho...
2) $5 says the next Nexus is a Motonovo device, which could be really interesting IMO... They're basically next in line anyway (HTC had one, and the G1, Samsung had two and so did LG), unless they go back to HTC or Sony. A Moto Nexus could never happen as long as Moto was Google's tho, too many people would cry about it regardless of how inconsequential.
Krysto - Thursday, January 30, 2014 - link
I'm still hoping for a Sony Nexus one last time (if Google decides to kill Nexus brand after that).I think it would be too early for a Lenovo/Motorola Nexus, since it would basically have to be Motorola anyway. If they would've planned for a Motorola Nexus, it would've happened already since last year. So it would be all-Motorola, and won't have anything to do with Lenovo.
dragonsqrrl - Wednesday, January 29, 2014 - link
What do you think this means in terms of Android updates for the Moto X and Moto G? I'm wondering if this could have a negative impact on the swift updates we've seen thus far.darwinosx - Thursday, January 30, 2014 - link
This means you will see few to none.nevertell - Wednesday, January 29, 2014 - link
No, Lenovo's acquisition of IBM's Laptop department hasn't gone well, at least for the consumers. Comparing X60 to X200 to X230/X240 shows a trend of decreasing quality, decreasing costs, removing features.Also, since China is as eager to spy on us as the States, this could mean that the next Motorola phones will not only be backdoored by the U.S. but also Chine.
shadowdude777 - Wednesday, January 29, 2014 - link
My thoughts exactly. I came here to post that I used to own a T420. I bought a ThinkPad Yoga and returned it because the build quality was awful. I've played with a friend's T440 and the build quality is also similarly disgusting. Lenovo HAS ruined the ThinkPad brand. They've turned it into just another cheap, low-margin, cost-cutting laptop. ThinkPads used to be about quality without compromise.Bashfu11 - Thursday, January 30, 2014 - link
The fact remains however that you can still spend the money and get a high end, well built Thinkpad notebook, with a carbon body solid as a rock. In addition to that, when I compare Lenovo Thinkpad notebooks to compatible HP G series, Acer E-Series and low end ASUS K series, well Lenovo takes the cake by a wide margin in my personal opinion. They have widened the brand, yes.... but margins are not great and competition is abundant in the OEM space. I still think the notebooks are top knotch, just not at the bottom of the barrel price points. Still, those cheap units are great compared to the cheapos that other companies make.Tosis - Thursday, January 30, 2014 - link
You're comparing the wrong products to what Lenovo's marketing the ThinkPad too. Relatively speaking, IBM and early Lenovo ThinkPads have much better design and build quality. Also, ThinkPads are competing with HP EliteBooks and Dell Precisions and nothing from ASUS, Acer, etc. The current ThinkPad is no longer a business notebook. It is a consumer notebook.I wonder how that would translate to Motorola phones. Will the quality of Motorola phones gradually decrease like how the ThinkPad did or will they get better? I hope they get better.
zzzaac - Wednesday, January 29, 2014 - link
Ironic, since, that USA seems to be eager to spy on her allies as wellmelgross - Thursday, January 30, 2014 - link
Everyone spies on their allies. It's part of the way the world works now.darwinosx - Thursday, January 30, 2014 - link
False equivalence.stratum - Wednesday, January 29, 2014 - link
I agree. The ThinkPad line has been ruined by Lenovo. My company even stopped issuing them to us. ThinkPad != business qualitymeyers64 - Thursday, January 30, 2014 - link
My company as well has phased out ThinkPads. Now, any person being upgraded or getting a new notebook does not have an option to get a ThinkPad anymore. We can only choose from EliteBooks and Precisions.beginner99 - Thursday, January 30, 2014 - link
I own a x220 and have an elitebook at work. And the x220 is just better. Especially the keyboard. That keyboard is better than many desktop keyboards.nevertell - Thursday, January 30, 2014 - link
Yes, but as of X230, they no longer manufacture the superior thinkpad keyboards, now they're all chiclet style keyboards. X220 is one of the last acceptable X series thinkpad unfortunately.And whilst MrSpadge makes a good point, I see a lot of asus's laptops nowadays that are quite sturdy and feel great, but are not business oriented. It's not just the materials, it's the design. Thinkpads are easy to disassemble and repair, but the latest ones don't even come with a removable battery. They could have powerful docking stations with thunderbolt and whatnot, but they are just not doing any of that stuff. Whilst you do have to pay for the design tradeoffs on every device you manufacture, you shouldn't skimp on the design process- a well designed device, chassis, motherboard will be in many cases reusable and will greatly increase the value of the laptop in the market. You can't just make a magnesium alloy chassis and slap a thinkpad badge on it and hope for money to flow in. This is the one thing Apple has gotten right and most other manufacturers have not.
arturoh - Thursday, January 30, 2014 - link
Lenovo didn't ruin the ThinkPad line overnight. It was gradual. First they let design stagnate for a while but definitely lowered the build and quality control. Next they started lowering the quality of the design: less rugged (ie. changing build material, putting holes in the frame, etc.), less fixable onsite and removing business features. Lenovo also stopped providing the MIL-STD test results. If you're familiar with MIL-STD, then you should know that it's a useless rating without the test results.The ThinkPad --20 revision (ie. X220, T420, T520, etc.) were where the design and build quality was just tolerable from the business user/IT point of view. The --30 model year was the last my company issued to the employees.
darwinosx - Thursday, January 30, 2014 - link
Same here. My company has almost 170,000 employees and they dumped Lenovo.MrSpadge - Thursday, January 30, 2014 - link
For everyone complaining about Thinkpads not being what they used to be: keep in mind that continuing as they always did was not an option for IBM. They simply didn't make enough profit like this (or was it a profit at all?), as much as some people loved them. So by taking over and slowly transforming things Lenovo gave us a "Thinkpad-like" option at all - and I suppose they're moving far units now than back then.Which doesn't mean they should completely forget about build quality, though.
Tosis - Thursday, January 30, 2014 - link
It's unfortunate that in order to make the ThinkPad profitable, both design and build quality must be lowered significantly.That's the problem though. That might mean the design and build quality of Motorola phones will also be lowered. The X220 was the last acceptable but still inferior ThinkPad I own. I wonder if I'll stop buying Motorola phones in the future.
darwinosx - Thursday, January 30, 2014 - link
Yet somehow other companies, like Apple sell premium products at premium prices and do quite well. Ditto for HP workstation laptops. I don't think much of a lot of HP's products but their workstation laptops are excellent.Lenovo simply decide to go to a lower level of quality on all of their products.
darwinosx - Thursday, January 30, 2014 - link
Absolutely right. Lenovo quality is far from IBM Thinkpad quality. prices are far lower but they cut everything to get the price down. Quality of components and quality control of manufacturing.darwinosx - Thursday, January 30, 2014 - link
They already are. Motorola phones are made in china and have been for some time.gdansk - Wednesday, January 29, 2014 - link
I really liked the Moto X. I didn't think it was a worth it to upgrade from my Nexus 4, though. We'll see if Motonovo can be as competitive this next year.I'm interested to see if Lenovo keeps manufacturing in Texas.
Penti - Wednesday, January 29, 2014 - link
What a loss?! While not giving much thought about why they would sell, they are not really a hardware company and it's a separate unit so it makes sense at some point, but for $3 billion well then Lenovo at least should be able to make something of it, but Google bought it for 12.5 billion. Selling other business from that unit for what? Another 2.35 billion US. Now Lenovo gets the phone-business for just 660M US up front. Well I guess they at least will take the European market serious now, Motorola/Google didn't really, while at the same time taking over the remnant of the former major US-player and a strong brand.Since Nokia's departure with their new direction 2011, that effectively makes the business only in the hands of the Koreans, Chinese, Taiwanese and Japanese now. The companies in Europe and US gave up as always. If not by themselves then with help by North American executives. High tech seems not to be anything for us today, and inventing much of the consumer goods, refrigerators, mobile phones, semiconductors as well as the science doesn't matter if you loose the drive.
Malih - Wednesday, January 29, 2014 - link
"The companies in Europe and US gave up as always. If not by themselves then with help by North American executives."I suppose that's the reason why the likes of Samsung and ASUS grow big, although it remains to be seen with Apple trying to break the cycle by starting to manufacture in the US.
errorr - Thursday, January 30, 2014 - link
Don't forget the 3B in cash on the books.It was always about the patent portfolio that Motorola basically blackmailed Google into this stealth buyout.
Impulses - Friday, January 31, 2014 - link
It's a global economy, get used to it, yada yada... However, it's worth keeping in mind that while the job of design and integration that these OEMs carry out is important, what's actually going into the devices is probably more important still... A lot of that is still designed by US companies (Qualcomm, NV, Intel, etc). Not all mind you, stuff like display tech is strictly up to the likes of LG, Samsung, Sharp, etc.Penti - Friday, January 31, 2014 - link
It's a good company for Lenovo to buy, loss of competency and industrial leadership is more worrying on a nation level however I think Lenovo would rather contribute here so it's more of a leadership and ownership issue. As everything can't be managed by people overseas, but here in Sweden we still do some handset development at Sony as well as some at the offices of the mainland Chinese vendors. Finland should kick out the remnants of Microsoft's handset business as quick as possible though, as they quickly removed any potential to develop it even before actually buying the business. So it leaves room for other businesses. ST - Ericsson cooperation fell through though so no SoC's from us anymore, but Ericsson still does modems, and the modems from the Finns/Japanese ended up at Broadcom I think. As long as it's not totally erased there's at least some potential left.While much of the new high-tech technologies ended up in Asia and semi-new players it's amazingly to a large extent in the high-cost OECD-countries. While we can't even make lead-batteries in Sweden any more let alone lithium cells It's Korea and Japan that's leading there, and the Taiwanese and Chinese battery makers mostly use their cells. But that only makes it more sad when a country truly gives up on something they are good at. But it's not really the case here, Motorola went down long before a small resurgence with android based devices. At least Sweden and Finland designs and develops, even does some of the assembly and manufacturing of base-stations while that business is none existent in the US and North America where every player and most of the technology has fallen and been forgotten while law-makers yell about excellent Chinese equipment that they don't want to buy even though there is no US-designed stuff any more.
European and Japanese players have removed themselves from much of the consumer electronics businesses they built though, on the Display side it's only Sharp and Panasonic that actually develops and manufacture large panels any more in Japan or has any financial interest in manufacturing/buying them. That means that companies like Hitachi, Pioneer, and Fujitsu fully stopped making and selling TV's exiting the market all together with the changes, those are to a large extent based on domestic problems though.
Motorola and Nortel where giant's in their industries at some point and large conglomerates, it doesn't take that much to erase most of the business and divide it up in half a dozen companies.
Semiconductor design and Semiconductor manufacturing still is within the grasp of the Europeans, Japanese and Americans though. Taiwan is mostly a merchant player, while Korea's Samsung has one of their most advanced merchant fab in Texas. Common platform partners has fabs in US, Japan, Europe and other parts of Asia. But it often depends on companies – at least in a regional sense – that can't afford to loose their direction. Qimonda just dropped of the earth, and Elpida got bought by Micron because they couldn't finance themselves for example. There is both pretty competitive while in a semi-related field by another player it's not really competitive any more, so it depends greatly on industry and respective market-segment. As always. Some segments have other emerging players, some don't. An missed investment and trusting others to supply you can spell the end of a companies entire field.
Penti - Thursday, February 6, 2014 - link
Didn't mention Mitsubishi's exit or Toshiba's exit from making LCD-panels there. Now Sony has finally announced that they are withdrawing (planning to) from the TV-business too. As expected. Well at least if they can get someone to take over the new company that will run the TV business.Philips did the same here in Europe, first divested itself from joint ownership of a LG LCD-fab and later gave up their TV-business to TPV that already ran and operated the company selling philips-branded monitors as well as manufactured most units for them. Though they still had some ownership that they gave up now in January. Those remaining is those that still manufactures panels pretty much.
jameskatt - Wednesday, January 29, 2014 - link
Samsung was about to ship Tizen smartphones to compete with Android phones at the low end of the market.Samsung signed a pact where
1. They both exchange rights to their respective patents.
2. Samsung stops Tizen development and stays with Android
3. Google drops hardware development - selling off Motorola and ending Nexus.
Google did all of this to prevent Samsung - the dominant and only profitable Android hardware maker - from leaving the Android camp. It is a deal between two devils.
Samsung was pressure by Apple into coming up with Tizen to increase its own profits. Now it gets to keep a higher share of its profits by not having to pay Google for an Android license.
Apple's next move? To share the profits from Apple Ads with its consumers through their iTunes accounts. This would enormously incentivize consumers to click on Apple's ads, while ignoring Google's Ads. Apple makes profit from hardware and thus doesn't need the extra pennies from Ads. Google on the other hand copy this since this would enormously cause it to lose profit.
A5 - Wednesday, January 29, 2014 - link
Apple isn't going to give up iAd money. Don't be ridiculous.zzzaac - Wednesday, January 29, 2014 - link
Agree, it would be silly for Apple to give up iAd moneyBob Todd - Wednesday, January 29, 2014 - link
Ads make money purely by volume. You think consumers would care about a few fractions of pennies from those 20 ads they saw?extide - Thursday, January 30, 2014 - link
"Samsung was pressure by Apple into coming up with Tizen to increase its own profits. Now it gets to keep a higher share of its profits by not having to pay Google for an Android license."Samsung (nor anyone else) does not have to pay Google a license for Android...
darwinosx - Thursday, January 30, 2014 - link
Wrong. All OEM'S who use Android with Google services pay a licensing fee. Google has sued companies who didn't do so.There is very little open source in Androids claim of open source. It fails on almost all the standard definitions of open source. But the rubes still lap it up.
Anders CT - Thursday, January 30, 2014 - link
@darwinosxAndroid is fully open source and there is no licenswe fee for Googles bundles apps.
darwinosx - Thursday, January 30, 2014 - link
Everything jameskatt said is wrong and pretty silly. Google does not care, at all, about Tizen. The idea is laughable.Apple isn't Google. Google is an ad company. iAd is a minor sideline for Apple. There is not a lot of profit there and why you think they have any reason to share revenue with customers is beyond me.
jameskatt - Wednesday, January 29, 2014 - link
From daringfireball.net:I’m sure Samsung loves getting pushed around like this. Samsung doesn’t have a replacement for Google Maps, for example, so their backs are to the wall on this — and from what I’ve heard from a little birdie, Maps is one of the services Google is using to get Samsung to fall in line. It’s not really much of a negotiation — it’s Google telling Samsung to stick to near-default Android or they won’t license Maps and other Google services.
dczyz - Wednesday, January 29, 2014 - link
I just want Moto to open up the Razr's so I can get android updates!madwolfa - Wednesday, January 29, 2014 - link
They did good with ThinkPad line overall, but I don't like the direction they're going with it now.darwinosx - Thursday, January 30, 2014 - link
Uh what? You must have never seen an IBM Thinkpad if you think Lenovo Thinkpads are good.Stimpack - Wednesday, January 29, 2014 - link
I hope this doesn't effect their quality. I planned on buying a Moto G in about a month.blanarahul - Wednesday, January 29, 2014 - link
Well. Goodbye Motorola. Hello Sammy.darwinosx - Thursday, January 30, 2014 - link
From the frying pan into the fire.Cheap plastic construction.
Low quality screen.
Horrible Touchwiz.
Features that don't work.
Ugh. Even a lot of Android fans are disgusted with the S 4.
flyingpants1 - Sunday, February 2, 2014 - link
Agreed, although the build quality is not an issue for case users most of the time. Touchwiz makes the fastest phones seem slow.I don't like the variance in features. If I had to pick a phone today, it would be between the HTC One for the front speakers, the LG G2 for its incredible battery life.. but I'd probably end up going with the S4 so I could have 80gb of storage space. I want my phone to replace an iPod touch.
stratum - Wednesday, January 29, 2014 - link
My IT department stopped issuing ThinkPads last year because the ThinkPads just couldn't cut it anymore. At least from my company's point of view, the ThinkPad brand has certainly been ruined.JlHADJOE - Thursday, January 30, 2014 - link
Mission Successful; Patents Acquired!--Google
dishayu - Thursday, January 30, 2014 - link
That's a 10 billion straight-up loss for Google in less than 2 years by my calculations. Didn't they pay 13 billion or so, to aquire Motorola mobility in 2012?JlHADJOE - Thursday, January 30, 2014 - link
Considering they got Moto's patents, I don't think it's a loss at all.They just got rid of a hardware division they likely didn't want to have in the first place.
zodiacfml - Thursday, January 30, 2014 - link
Agreed. That is basically it.BillBear - Thursday, January 30, 2014 - link
Those patents are not nearly worth what Google thought they were worth at the time. Andy Rubin was the major advocate for the purchase and notice that he no longer holds a high level executive position in the company.First, the courts have ruled that standards essential patents such as those held by Moto cannot be used as a legal weapon against Google's competitors as Google assumed they could.
http://www.zdnet.com/in-microsoft-patent-spat-ruli...
Microsoft was even awarded a minor damages amount for Moto breaking it's pledge to license their standards essential patents in a FRAND (Fair, Reasonable And Non Discriminatory) manner.
http://news.cnet.com/8301-10805_3-57601432-75/micr...$14.5m-in-motorola-patent-licensing-suit/
More seriously, the US threatened antitrust action against Google for their abuse of standards essential patents, which Google only avoided by immediately pledging to never abuse them in any current or future legal case.
Even more seriously, regulators in Europe have not backed down on their own antitrust case over Google/Moto's misuse of standards essential patents and the standard fine in the EU is ten percent of the guilty companies profits.
http://www.washingtonpost.com/business/technology/...
Those patents are not only not worth what Google thought they were worth, their misuse has opened up Google to a massive fine. and ongoing antitrust action.
Devo2007 - Thursday, January 30, 2014 - link
They also sold Motorola's cable set-top box division to Arris for 2.3 million, so that helped as well.Google is also keeping the Advanced Technology division, so when everything is all said and done, it's not really as bad of a deal as it may look on the surface.
Devo2007 - Thursday, January 30, 2014 - link
errr.....that's 2.3 BILLION.Krysto - Thursday, January 30, 2014 - link
Copying someone else's comment:"Motorola had ~$3B in cash when acquired. Google previously sold their set-top box unit for $2.35B and realized about $1.7B in tax benefits from previous losses. However since acquiring it has taken $1.038B in losses, which is $0.67B post-tax. There will be another write down for the lost goodwill less the value of the remaining IP that should be worth very approximately $1B. So including the $3B from Lenovo, they recouped approximately $10.4B of the initial $12.5B purchase price."
So $2 billion loss, and what they got out of it is access to all Samsung's patents and all the new ones over the next 2 years, and for them to follow Google's vision for Android. I think Google came up on top here.
Doh! - Thursday, January 30, 2014 - link
I agree. Most people are just assuming the sale of Motorola Mobility resulted in a big loss to Google. It's completely the opposite. The deferred tax benefits realized from the operating losses and write-offs of assets will more than compensate for the investment loss incorrectly assumed by the readers.dishayu - Thursday, January 30, 2014 - link
That was a really useful insight. Thank you.ThortonBe - Thursday, January 30, 2014 - link
Yes, Thanks for that. I knew Google wouldn't just throw money away for no reason. Still I'm leery about getting a Motorola X now due to updates. I can't imagine they'll keep the updates going..fteoath64 - Friday, January 31, 2014 - link
@Krysto: "So $2 billion loss, and what they got out of it is access to all Samsung's patents"On patents of Motorola that Google thinks are worth $5B, so they are $3B ahead!. Good move by Google and great move with Lenovo who an now play well in China with the Moto brand which is very strong and is useful in the Asian market as well. Plus with good distribution, Lenovo will be able to sell the Moto-X and Moto-G phones way better than Google ever did.
marc1000 - Thursday, January 30, 2014 - link
from the blog post: "Google will retain the vast majority of Motorola’s patents".This is the real reason why Google purchased Motorola. The hardware assets are not what they wanted, this Lenovo deal makes perfect sense for them.
Not so sure about us, but then I stopped buying Androids because they killed the value of GPS navigation in the Maps7 update. My main reason to use Android is gone, so it could just vanish. My next phone will anything other than Android.
hero4hire - Friday, January 31, 2014 - link
There are alternatives out there too you know. E.g. 3rd party offline GPS mapsdeyannn - Thursday, January 30, 2014 - link
Well this puts me in front of an awkward choice.I gave the chinese a chance and am quite happy with my extremely low budget dual sim Lenovo A820 that I've been using for about 6 months now (previously I had an HTC Tattoo and a Samsung i9000). And I've seen a number of other Lenovo phones all in the 130-230 USD range (price includes worldwide shipping, etc.) - low enough so I don't care too much if I drop it, fast enough with the MTK65xx SOC.
Due to the Chinese OEMs not being very fond on sharing their source code (FAEA and Oppo aside) due to MediaTek license complications I decided my next phone would be a Motorola (looking in the direction of the Moto G) so I can have better software support.
I know Lenovo should be able to put a good use of Motorola and finally start selling good quality budget phones in the EU or the US. They can make good quality hardware (this budget A820 has a metal frame inside and doesn't twist or break easily and I've dropped it more than 10 times already by accident from height ranging 1-1.6m - the highest drop being on a cement floor in my parking lot and not a major scratch) but they don't use the best hardware (no Gorilla glass or Dragon glass) ... and they tend to bloat their devices with a ton of apps. So I got mixed feelings about this acquisition - it removes my next choice of OEM
But don't underestimate Lenovo - reports say they are #2 on the Chinese smartphone market right behind Samsung which if true is really big.
I'd be interested to read an Anandtech article on Chinese phones and comparison with the big Koreans (Samsung, LG) as there are tons of Chinese brands out there - to name a few:
Lenovo, Xiaomi, Oppo, Meizu, Jiayu (low scale), Freelander (an OEM for some of the other brands), etc. etc.
Penti - Thursday, January 30, 2014 - link
You can't really make a Moto G on MediaTek so that's at least something.deyannn - Thursday, January 30, 2014 - link
Indeed. But due to the low cost of the moto g I've seen it compared to some of the more feature rich and expensive mediatek powered phones. If Moto G was available here 6 months ago it would have been the obvious choice. I sincerely hope Lenovo will make proper phones using Motorola's know how and start using proper parts like Snapdragon instead of MediaTek. But I've seen for myself their phones have good quality for their price. ( I've played around with a820, s750, p780 and will be checking a850 and s820 in a couple of weeks most likely.)Also since a820 costs between 20 and 25 % of the price of a galaxy s 4 people around here ordered lots. I've imported 5 for be and my friends and I've seen 5 co workers but them (multiple times each for friends and family)
darwinosx - Thursday, January 30, 2014 - link
Lenovo makes cheap, lower quality devices which anyone who owned the previous line of IBM Thinkpads can attest to.Google got raped on this deal and their shareholders should be screaming to high heaven. But since Google is an ad company their profits from ads paper over this debacle resulting from the idiotic purchase of Motorola for almost 13 billion dollars.
Google never had any intention of keeping Motorola for manufacturing. Ask anyone who works there, this was obvious to them from day one. They thought the patents would help them fight lawsuits but not only have the patents been worthless they have lost every single court case after spending millions on lawyers.
The word is serial copier Andy Rubin was booted from his position because he strongly supported buying Motorola but also because he exposed Google and their partners to massive litigation by copying so much of Android.
toyotabedzrock - Thursday, January 30, 2014 - link
Didn't Microsoft basically give windows mobile away for a while? And the vendors in turn made crape hardware. Or at best they will just follow Apple and never innovate on their own.hrrmph - Friday, January 31, 2014 - link
Interesting and insightful analysis. Good to see AT stepping out a little with some bold predictions of future markets being created.It's hard to believe that the mobile market is maturing already, but it does look like everyone is nervously looking over their shoulders and wondering what to do when the growth stops.
It looks like Google is making it clear that their response is to bail out on smartphones...
.... Following that logic, Nexus will be the next to get dumped overboard.