At this point, Motorola has been passed from company to company like a loose cheerleader amongst a football team. We all know the original buy. Google in a landmark purchase, spends upwards of twelve billion dollars to essentially secure the hundreds of patents in Motorola's portfolio. After purchase however, it is implied that Google was quick to realize that the patents were not as useful as they were originally thought to be.
Then news recently surfaced that Lenovo would pay just shy of three billion dollars to acquire the once titanic cellular giant. But why the price discrepancy? Google decided that the patents were indeed useful to them and the sale is taking place without most of the patents that were originally consumed by Google. The patents in the first place were purchased by Google to protect them from rival companies and patent trolls. It is not clear however if this tactic ended up putting Google in the positive in the long term.
But was this sloppy seconds transaction a smart business decision by Lenovo? I think not. It is a sure fact that the reason for Lenovo's purchase was in fact to try and gain a footing in the competetive cellular device market in the states. However it is unclear if customers still hold the same brand loyalty to Motorola as they once did. Motorola as a brand is not the same as it once was. And simply applying a historical brand to a device does not make it any better. Motorola simply has too much mileage on it. In the past it was a thing of beauty. The beauty is long gone and what remains is a fraction of its former glory.
Full article can be accessed below:
http://bgr.com/2014/01/29/lenovo-motorola-3-billion-dollar-merger/
Then news recently surfaced that Lenovo would pay just shy of three billion dollars to acquire the once titanic cellular giant. But why the price discrepancy? Google decided that the patents were indeed useful to them and the sale is taking place without most of the patents that were originally consumed by Google. The patents in the first place were purchased by Google to protect them from rival companies and patent trolls. It is not clear however if this tactic ended up putting Google in the positive in the long term.
But was this sloppy seconds transaction a smart business decision by Lenovo? I think not. It is a sure fact that the reason for Lenovo's purchase was in fact to try and gain a footing in the competetive cellular device market in the states. However it is unclear if customers still hold the same brand loyalty to Motorola as they once did. Motorola as a brand is not the same as it once was. And simply applying a historical brand to a device does not make it any better. Motorola simply has too much mileage on it. In the past it was a thing of beauty. The beauty is long gone and what remains is a fraction of its former glory.
Full article can be accessed below:
http://bgr.com/2014/01/29/lenovo-motorola-3-billion-dollar-merger/
I'm sure Lenovo had good reasons for buying Motorola, but it's no surprise that Google got the better deal. They're bigger, better, and more powerful than most corporations. Google wants to maintain that dominance, no matter how many billions of dollars are spent. In the patent war, the winning factor seems to be how long a firm can stay ahead of the curve, because lesser firms are bound to fall behind in time.
ReplyDeleteI agree with your point that Motorola is not a brand that would bring a lot of value to Lenovo. Yet I don't think Lenovo is necessarily motivated to execute the purchase for the brand. Lenovo possibly wants the ability to expand through the channels that Motorola currently holds. They can use the Motorola as a resource for its own growth and kill the Motorola brand all together.
ReplyDeleteIf you look at the evidence, you'll see that Motorola actually marketed and sold two pretty successful phones in 2013. On top of that, Lenovo has the market know-how to successfully take Motorola to the next level. They specialize in the low-end smartphone market, which is why this combination with Motorola may actually be perfect.
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