Motorola Mobility sale to Chinese Lenovo - facts, consequences, analysis

The Lenovo-Google deal is only part of the alliances that Google is making, it is a consequence of Samsung becoming Google's main hardware partner, we talked about this in a separate article - I highly recommend reading it if you haven't already done.

Motorola's history as a manufacturer of mobile phones and smartphones actually ended in 2011, when it became known that its division responsible for these products was being bought by Google. Even though Motorola-branded products continue to hit the market, that doesn't change the fact that Motorola is unsuccessful, hurts Google, and doesn't have any impact on the market, either in sales or in ideas. In 2012, in a separate article, I described in detail the consequences of the transaction and what it will lead to, let me quote: “In August 2011, I wrote that Google was buying a very expensive laboratory to develop new services, services and products. As you know, scientists and engineers are important in the laboratory, but not marketing specialists. In the nine months that have passed since last August, Google has been thinking about what, in addition to patents, they will be able to get from this purchase. And once again, it was technology. Today, many consumers, journalists and even analysts perceive the company as a manufacturer of not very successful smartphones and regular phones. This is one part of the image of Motorola Mobility that pops into the minds of most people.”

After a little recursion with references to several of my materials, I will still give a link to one of the articles, it will be interesting to read it two years later.

It doesn't fit into the mind of ordinary people that Motorola Mobility was acquired by Google for $12.5 billion and is now being sold to Lenovo for $2.91 billion. It turns out that the company lost almost 10 billion on this deal? If you use simple mathematics, then this is exactly the story, but in reality everything is somewhat more complicated.

Firstly, by acquiring Motorola Mobility, Google was also given the burden of manufacturing and developing set-top boxes and similar devices that the company did not need. The Motorola Home division was sold to the Arris Group in December 2012 for $2.35 billion and closed in April 2013.

Secondly, when buying Motorola Mobility, the company saved $1 billion in taxes, that is, the real amount of the transaction was lower.

In 2011, Google valued Motorola Mobility as follows:

  • Patents and developments - $5.5 billion;
  • Motorola brand worth $2.5 billion;
  • Motorola's net worth is $3 billion;
  • Other assets (factories, offices, etc.) - $1.55 billion

It's easy to calculate that in 2011 the real value of the purchase was $4 billion less, then subtract another $2.35 for the Home division, then $2.91 billion from the Lenovo deal. In total, we get that Google is in the "minus" by 3.24 billion dollars. But is this minus real?

With the sale of Motorola Mobility, Google retains the entire patent portfolio, which was valued at $5.5 billion two years ago, a value that has not changed over time. In addition, the most promising areas of development, talented teams of engineers and a number of small R&D centers remain at Google. Lenovo doesn't get much for its money - it's the Motorola Mobility structure, the company's main offices and a number of minor engineers working on current products, but not on the most promising developments. And here the question arises, why does Lenovo need this and what is the benefit for the Chinese company? To answer this question, we need to look at what the largest computer manufacturer in the world is today and in what direction it can develop.

Lenovo - Chinese state and private business, survival strategy

Lenovo was originally conceived as a tech start-up that received a small amount of funding from the Chinese government through one of its technology grant programs. At that time, the company had a different name, but we are not interested in this aspect of the issue under discussion. For those who want to know in detail the history of the company, as well as how it developed and became the largest PC manufacturer in the world, you can read this text in English - it describes all these issues well.

The only fact that matters to us is that the Chinese government has leverage over Lenovo and is interested in its development. The company has complete freedom in decision-making, but strategic decisions about the future of the company cannot be made without the participation of the main co-owner in the person of the Chinese state. This also prevents the company from selling itself to anyone, each expansion of the number of shareholders, changes in their shares are controlled by China.

Successes in the PC market quickly made the company a world leader, making it a major player in all countries where it had priorities, including the US market, where such players as HP and Dell are traditionally strong. The philosophy of the company, laid down by its founders, implies that not only the product is important, but also distribution channels, this is the combination that made Lenovo successful in the market.

Lenovo has never had a strong team with a strategic vision in all areas of the market, in particular the mobile device market. This is largely due to the fact that the Chinese government limits its own companies, allocates them certain areas of development, creates conditions so that they do not interfere with each other and do not create excessive competition. A sound approach, which, however, does not always lead to the desired results. The company entered the mobile phone market in 2002, when it created its own division responsible for such devices. Due to excellent distribution channels in China, Lenovo phones became popular in a short time - they were distinguished by a low price, as well as low quality, which was not critical for consumers in their home market, but created problems outside the country. At that moment, the company was unable to enter foreign markets, as a result, in 2008 this division was sold for $ 100 million to a group of investors. In 2009, Lenovo Group returned the daughter, but already paid $ 200 million for it. Such illogical behavior is due to the fact that the company saw the growing influence of mobile phones and made a strategic decision to become a large manufacturer. But Lenovo was not able to compete with Huawei, ZTE and a number of other companies. The positioning of the company was such that it collected the developments of small factories and produced under its own brand - Lenovo did not have its own and strong developments, this became a weak point.

Lenovo was able to conquer the Chinese phone market in a very short time - for this the company had all the prerequisites in the form of an existing distribution network, low cost of phones, high margins that were offered to partners. What were these phones? Devices made in countless Chinese factories that were sold under the brand name of the company. The lack of a single quality standard, a high failure rate - all this was compensated by the variety of models, their low price, which was important for this market. To some extent, we can say that Lenovo in China played the role of a large system integrator, collecting a lot of other people's developments under its wing. Lenovo, like all local players, benefited from the fact that third-generation networks are practically not developed in China, they are not mandatory, and consumers often focused on relatively cheap solutions without their support. It is low cost that rules the show in China, hence the very modest sales of smartphones against the general background of phone sales, but this market segment is growing rapidly, and in 2012 Lenovo decided to play a very active role in it. Pay attention to the percentage of smartphone sales in China and the position of the company in 2012.

According to the results of 2013, the company is among the top five world leaders in the smartphone market, taking the same fifth place (IDC data).

But the most curious thing is that 96 percent of Lenovo's sales are in its home market, that is, the company is strong only in China, while in other countries its products are almost impossible to find. In 2012, Lenovo launched its own sales in Indonesia, Russia, Ukraine - here the company's strategy was fully manifested, the emphasis on existing partners, those who already sell Lenovo products. As a rule, these are consumer electronics chains, and by no means retail, focusing on cell phones.

It is extremely important to understand that being number one in PC sales does not mean that you have the opportunity to take a significant share of the market in phones. This erroneous opinion of many manufacturers led to losses, as well as many computer retail chains tried unsuccessfully to reorient themselves to the sale of smartphones both in Russia and in other countries. Lenovo's success story in China is rather an exception, and it is in tune with the similar success of Fly in Russia, MicroMax in India - these companies fulfill the same role as Lenovo, have exactly the same strategy.

The stagnation of the PC market poses a difficult question for Lenovo - how the company will survive in the future, although today is more than fine, because sales are growing at the expense of other, less successful players who have not made the right bet on products that the market needs. Today's growth comes from eating away market share from others, not the overall growth of that market. That is, such growth is finite. After all, by wiping out or wiping out the market share of competitors, Lenovo may find that all of the PC market's problems suddenly become Lenovo's own. Apparently, the company does not want to turn into a lifetime monument to the PC market, and therefore they rushed into the smartphone segment.

In 2011-2012, Lenovo executives repeatedly said in interviews that Android is a priority for the company, it allows you to create new products in a short time, potentially selling them around the world. In 2012, the company made a strategic bet on MediaTek and its chipsets, which was important for the Chinese market, where there was competition in the cost of products.

Lenovo and Google are the two winning parties in the Motorola deal

During the day, I received calls from various publications asking for comments on the deal to sell Motorola Mobility, often journalists asked directly why Google bought the company for 12.5 billion and sells it so cheaply. In the first part of the article, we analyzed this question, and I think that the obvious answer sounds like this - the sale is not at all as cheap as it might seem, moreover, Google received more than they could expect. And at the same time, they got rid of the troubled asset, which brought losses (only in the third quarter of 2013, 248 million dollars). There was no need to continue layoffs, in 2012-2013 the company laid off about 6,000 employees and fulfilled huge social obligations to them.

Google is not giving away all of Motorola Mobility to Lenovo - a number of research groups remain with the company, such as the publicly announced Ara modular phone project.

All patents and developments remain with the company, they are not part of the deal. You can also say that all the key developers capable of creating next-generation technologies do not go to work at Lenovo - the Chinese company receives only ordinary engineers who are good, have vast industrial experience, but are not at all able to create brilliant products. That is, the overall technological level of the sold Motorola Mobility is greatly underestimated, the cream remains Google. And Lenovo is aware of this, as they receive many other advantages.

Google was able to increase the cost of the transaction due to the "goodies" that no one talked about as part of what was happening. These additional points cannot be directly estimated, but the CEO of the company in an interview with the Wall Street Journal said that the company plans to sell 100 million smartphones within a year after the closing of the deal. It was also stated that the company will use the Motorola brand in the US, Latin America and possibly launch in China. For China, this will apparently be a premium brand. Interestingly, Lenovo plans to write "Motorola by Lenovo" on phones. Compare this to how Motorola tried to be associated with Google in 2013.

It also indirectly indicates that Google has been discussing a deal with Lenovo since at least the end of 2012, when the first plans for the project in Texas appeared, and it was implemented in record time based on Flextronics. Curious support for Lenovo in trying to enter the US market.

As part of the Google-Samsung alliance, the Nexus program will become less significant, in 2015 it will almost disappear, it will be replaced by products of companies with "naked" Android, analogous to today's Google Play Edition. But in 2014, Google may make a parting gift for Lenovo, bring to market under the Nexus brand, one product of the company, on which Motorola by Lenovo will already be written. Given that this will be Lenovo's first product for the US, the launch will be loud and the price of the model low enough to make the price/performance ratio amazing. It is necessary to interpret this move as an advertising campaign, such prices will not last forever, and in 2015, consumers will remember such an offer with nostalgia. I don’t know if it will be a smartphone or a tablet, but still it seems to me that it is right to bring a smartphone, that is, to create a story around a product that Lenovo is not famous for yet. Even a circulation of a million devices will create an effect for Lenovo that cannot be achieved by any marketing investment, this will be Google's help.

Short conclusion

Lenovo's purchase of Motorola becomes the last chord in the life of this manufacturer, after the deal, models developed by the engineers of this company will be released for about a year, then the focus will change, and despite the presence of the brand on the bodies of the devices, these will be completely different devices - as with ideological and design point of view. In some ways, they will have something in common with past decisions, but in general it will become a different direction. You should not regret the disappearance of Motorola, since the company died in 2011, when Google bought it and did not develop it in any way. This was a foregone conclusion, which was proved by subsequent sales of devices - the brand did not recover, it did not become attractive in the eyes of consumers. The same Moto X received extremely modest sales of half a million units in the US, these are not the numbers that can be said to be successful. Motorola is currently dropping A GOOD PRICE HOUSE FOR SALE IN KIGALI AT KANOMBE the price of this model in an attempt to sell the quantities produced.

Perhaps, that's why you should not regret Motorola, it has already left the market, and it is gone. Now let's get back to Google. The company is very active in the market - it acquires assets, creates alliances that will change the landscape of the market. The main competition will take place between Apple and Google, these two corporations are preparing to actively conquer the world. Perhaps we can assume that Apple will also look for new alliances, primarily among manufacturers of chipsets and hardware. In the coming years, a fantastic situation may arise when the hardware / software platforms launched by Google become the main consumers of chipsets, memory, which will create huge problems for Apple and other companies, the cost of their products will increase markedly. This is a very insidious move on the part of Google, which is unparalleled in the recent history of the IT business, by creating super-successful products to increase the price of components for the largest competitor.

It seems to me that Google perceives Microsoft as a second competitor, which is already more blown away and does not have any strong developments in the short term, no special efforts are directed against this company, partners are being taken away from it quietly, in working mode and without extra effort. It should be understood here that Google, simply by expanding cooperation with key Microsoft partners, is forcing the company to take production into its own hands, bear all the risks and incur losses, as was the case with MS Surface.

Of course, for Google, this game is by no means guaranteed to lead to a win, there are many pitfalls. But suffice it to remember that the company has already prepared for a leap forward in technologies such as self-driving cars, wearable computers, and wearable electronics, which are only part of the overall trend. It can also be said that Google, without much publicity, is conducting promising developments in the field of information, managing social structures - that is, de facto trying to understand what controls our decisions, thoughts, and actions. It may sound a little fantastic, but these are quite real works that can lead to a breakthrough in this direction. The company has a huge future ahead of it, and as part of this strategy, the current alliances may sound amazing, but they are only the first steps towards something more. From a market point of view, Google is moving in the right direction and is growing its presence where it is strongest, squeezing out weak competitors.

Sale of Motorola Mobility to Chinese Lenovo - facts, consequences, analysis

The Lenovo-Google deal is only part of the alliances that Google is making, it is a consequence of Samsung becoming Google's main hardware partner, we talked about this in a separate article - I highly recommend reading it if you haven't already done.

Motorola's history as a manufacturer of mobile phones and smartphones actually ended in 2011, when it became known that its division responsible for these products was being bought by Google. Even though Motorola-branded products continue to hit the market, that doesn't change the fact that Motorola is unsuccessful, hurts Google, and doesn't have any impact on the market, either in sales or in ideas. In 2012, in a separate article, I described in detail the consequences of the transaction and what it will lead to, let me quote: “In August 2011, I wrote that Google was buying a very expensive laboratory to develop new services, services and products. As you know, scientists and engineers are important in the laboratory, but not marketing specialists. In the nine months that have passed since last August, Google has been thinking about what, in addition to patents, they will be able to get from this purchase. And once again it was technology. Today, many consumers, journalists and even analysts perceive the company as a manufacturer of not very successful smartphones and regular phones. This is one part of the image of Motorola Mobility that pops into the minds of most people.”

After a little recursion with references to several of my materials, I will still give a link to one of the articles, it will be interesting to read it two years later.

It doesn't fit into the mind of ordinary people that Motorola Mobility was acquired by Google for $12.5 billion and is now being sold to Lenovo for $2.91 billion. It turns out that the company lost almost 10 billion on this deal? If you use simple mathematics, then this is exactly the story, but in reality everything is somewhat more complicated.

Firstly, by acquiring Motorola Mobility, Google was also given the burden of manufacturing and developing set-top boxes and similar devices that the company did not need. The Motorola Home division was sold to the Arris Group in December 2012 for $2.35 billion and closed in April 2013.

Secondly, when buying Motorola Mobility, the company saved $1 billion in taxes, that is, the real amount of the transaction was lower.

In 2011, Google valued Motorola Mobility as follows:

  • Patents and developments - $5.5 billion;
  • Motorola brand worth $2.5 billion;
  • Motorola's net worth is $3 billion;
  • Other assets (factories, offices, etc.) - $1.55 billion

Lenovo - Chinese state and private business, survival strategy

Lenovo was originally conceived as a tech start-up that received a small amount of funding from the Chinese government through one of its technology grant programs. At that time, the company had a different name, but we are not interested in this aspect of the issue under discussion. For those who want to know in detail the history of the company, as well as how it developed and became the largest PC manufacturer in the world, you can read this text in English - it describes all these issues well.

The only fact that matters to us is that the Chinese government has leverage over Lenovo and is interested in its development. The company has complete freedom in decision-making, but strategic decisions about the future of the company cannot be made without the participation of the main co-owner in the person of the Chinese state. This also prevents the company from selling itself to anyone, each expansion of the number of shareholders, changes in their shares are controlled by China.

Successes in the PC market quickly made the company a world leader, making it a major player in all countries where it had priorities, including the US market, where such players as HP and Dell are traditionally strong. The philosophy of the company, laid down by its founders, implies that not only the product is important, but also distribution channels, this is the combination that made Lenovo successful in the market.

Lenovo has never had a strong team with a strategic vision in all areas of the market, in particular the mobile device market. This is largely due to the fact that the Chinese government limits its own companies, allocates them certain areas of development, creates conditions so that they do not interfere with each other and do not create excessive competition. A sound approach, which, however, does not always lead to the desired results. The company entered the mobile phone market in 2002, when it created its own division responsible for such devices. Due to excellent distribution channels in China, Lenovo phones became popular in a short time - they were distinguished by a low price, as well as low quality, which was not critical for consumers in their home market, but created problems outside the country. At that moment, the company was unable to enter foreign markets, as a result, in 2008 this division was sold for $ 100 million to a group of investors. In 2009, Lenovo Group returned the daughter, but already paid $ 200 million for it. Such illogical behavior is due to the fact that the company saw the growing influence of mobile phones and made a strategic decision to become a large manufacturer. But Lenovo was not able to compete with Huawei, ZTE and a number of other companies. The positioning of the company was such that it collected the developments of small factories and produced under its own brand - Lenovo did not have its own and strong developments, this became a weak point.

Lenovo was able to conquer the Chinese phone market in a very short time - for this the company had all the prerequisites in the form of an existing distribution network, low cost of phones, high margins that were offered to partners. What were these phones? Devices made in countless Chinese factories that were sold under the brand name of the company. The lack of a single quality standard, a high failure rate - all this was compensated by the variety of models, their low price, which was important for this market. To some extent, we can say that Lenovo in China played the role of a large system integrator, collecting a lot of other people's developments under its wing. Lenovo, like all local players, benefited from the fact that third-generation networks are practically not developed in China, they are not mandatory, and consumers often focused on relatively cheap solutions without their support. It is low cost that rules the show in China, hence the very modest sales of smartphones against the general background of phone sales, but this market segment is growing rapidly, and in 2012 Lenovo decided to play a very active role in it. Pay attention to the percentage of smartphone sales in China and the position of the company in 2012.

According to the results of 2013, the company is among the top five world leaders in the smartphone market, taking the same fifth place (IDC data).

But the most curious thing is that 96 percent of Lenovo's sales are in its home market, that is, the company is strong only in China, while in other countries its products are almost impossible to find. In 2012, Lenovo launched its own sales in Indonesia, Russia, Ukraine - here the company's strategy was fully manifested, the emphasis on existing partners, those who already sell Lenovo products. As a rule, these are consumer electronics chains, and by no means retail, focusing on cell phones.

It is extremely important to understand that being number one in PC sales does not mean that you have the opportunity to take a significant share of the market in phones. This erroneous opinion of many manufacturers led to losses, as well as many computer retail chains tried unsuccessfully to reorient themselves to the sale of smartphones both in Russia and in other countries. Lenovo's success story in China is rather an exception, and it is in tune with the similar success of Fly in Russia, MicroMax in India - these companies fulfill the same role as Lenovo, have exactly the same strategy.

The stagnation of the PC market poses a difficult question for Lenovo - how the company will survive in the future, although today is more than fine, because sales are growing at the expense of other, less successful players who have not made the right bet on products that the market needs. Today's growth comes from eating away market share from others, not the overall growth of that market. That is, such growth is finite. After all, by wiping out or wiping out the market share of competitors, Lenovo may find that all of the PC market's problems suddenly become Lenovo's own. Apparently, the company does not want to turn into a lifetime monument to the PC market, and therefore they rushed into the smartphone segment.

In 2011-2012, Lenovo executives repeatedly said in interviews that Android is a priority for the company, it allows you to create new products in a short time, potentially selling them around the world. In 2012, the company made a strategic bet on MediaTek and its chipsets, which was important for the Chinese market, where there was competition in the cost of products.

Also in 2012, the company begins to build its own production in Wuhan, China, plans to invest about 793 million dollars in its development and modernization over five years. Initially, it was said that production would start in October 2013. It is known from various sources that the construction has ended, the equipment has been placed, but so far we have not seen any phones from this factory on the market. It is possible that they are produced for the domestic market, which sounds logical. The design capacity of the factory is up to 40 million phones per year. This means that more than half of Lenovo's smartphones will be assembled in-house in 2014 (assuming that the company sold about 45.5 million in 2013 and will likely grow by 20-25 million in the current period).

Now let's take a quick look at what Lenovo's $2.91 billion acquisition of Motorola Mobility at first glance brings. The deal looks similar to buying IBM's computer business, which was losing money. At Lenovo, using a more popular brand, they were able to build their sales in the US and then in Europe - they created a strong brand that, starting from the IBM brand, has its own history and value. There is no reason to believe that a similar trick cannot be repeated with Motorola, despite the fact that the brand has depreciated in recent years, and quite a lot. You can breathe a second life into it and gain a foothold in new markets, primarily in the US market, which is focused on smartphones. Now let's take a look at what each side of the deal gets, it will be a very curious win-win situation.

Lenovo and Google are the two winning parties in the Motorola deal

During the day, I received calls from various publications asking for comments on the deal to sell Motorola Mobility, often journalists asked directly why Google bought the company for 12.5 billion and sells it so cheaply. In the first part of the article, we analyzed this question, and I think that the obvious answer sounds like this - the sale is not at all as cheap as it might seem, moreover, Google received more than they could expect. And at the same time, they got rid of the troubled asset, which brought losses (only in the third quarter of 2013, 248 million dollars). There was no need to continue layoffs, in 2012-2013 the company laid off about 6,000 employees and fulfilled huge social obligations to them.

Google is not giving away all of Motorola Mobility to Lenovo - a number of research groups remain with the company, such as the publicly announced Ara modular phone project.

It also indirectly indicates that Google has been discussing a deal with Lenovo since at least the end of 2012, when the first plans for the project in Texas appeared, and it was implemented in record time based on Flextronics. Curious support for Lenovo in trying to enter the US market.

As part of the Google-Samsung alliance, the Nexus program will become less significant, in 2015 it will almost disappear, it will be replaced by products of companies with "naked" Android, analogous to today's Google Play Edition. But in 2014, Google may make a parting gift for Lenovo, bring to market under the Nexus brand, one product of the company, on which Motorola by Lenovo will already be written. Given that this will be Lenovo's first product for the US, the launch will be loud and the price of the model low enough to make the price/performance ratio amazing. It is necessary to interpret this move as an advertising campaign, such prices will not last forever, and in 2015, consumers will remember such an offer with nostalgia. I don’t know if it will be a smartphone or a tablet, but still it seems to me that it is right to bring a smartphone, that is, to create a story around a product that Lenovo is not famous for yet. Even a circulation of a million devices will create an effect for Lenovo that cannot be achieved by any marketing investment, this will be Google's help.

What can Lenovo offer in exchange for these unspoken goodies that are steaming towards a deal? Perhaps most importantly, what Google needs is another push for the US and global Chromebook market, making them a top priority for 2014. The support of the largest PC manufacturer in this business means that the entire market will go in this direction (Google already has Acer, HP, Samsung). This also automatically means a drop in sales of Windows laptops, a reduction in their share both in the world and in local markets, primarily in the USA. One of the references to Lenovo's plans for Chromebooks and summer 2014 can be found in CNet.

In terms of corporate wars, Google is consistently pushing Microsoft out of the traditional market, as well as blocking the company's attempts to enter the mobile space with Windows Phone. So far, the Google game has been successful, and the agility with which the company buys the loyalty of Microsoft's traditional partners is surprising. Let me remind you that Lenovo is one of the key partners of Microsoft in the market, which strategically went into the field of mobile devices with Google and Android. Another piece of the puzzle may be the information that starting in 2015, Samsung does not plan to release Windows laptops. This information was not confirmed by the company, but was not refuted in any way.

Short conclusion

Lenovo's purchase of Motorola becomes the last chord in the life of this manufacturer, after the deal, models developed by the engineers of this company will be released for about a year, then the focus will change, and despite the presence of the brand on the bodies of the devices, these will be completely different devices - as with ideological and design point of view. In some ways, they will have something in common with past decisions, but in general it will become a different direction. You should not regret the disappearance of Motorola, since the company died in 2011, when Google bought it and did not develop it in any way. This was a foregone conclusion, which was proved by subsequent sales of devices - the brand did not recover, it did not become attractive in the eyes of consumers. The same Moto X received extremely modest sales of half a million units in the US, these are not the numbers that can be said to be successful. Motorola is currently dropping A GOOD PRICE HOUSE FOR SALE IN KIGALI AT KANOMBE the price of this model in an attempt to sell the quantities produced.

Perhaps, that's why you should not regret Motorola, it has already left the market, and it is gone. Now let's get back to Google. The company is very active in the market - it acquires assets, creates alliances that will change the landscape of the market. The main competition will take place between Apple and Google, these two corporations are preparing to actively conquer the world. Perhaps we can assume that Apple will also look for new alliances, primarily among manufacturers of chipsets and hardware. In the coming years, a fantastic situation may arise when the hardware / software platforms launched by Google become the main consumers of chipsets, memory, which will create huge problems for Apple and other companies, the cost of their products will increase markedly. This is a very insidious move on the part of Google, which is unparalleled in the recent history of the IT business, by creating super-successful products to increase the price of components for the largest competitor.

It seems to me that Google perceives Microsoft as a second competitor, which is already more blown away and does not have any strong developments in the short term, no special efforts are directed against this company, partners are being taken away from it quietly, in working mode and without extra effort. It should be understood here that Google, simply by expanding cooperation with key Microsoft partners, is forcing the company to take production into its own hands, bear all the risks and incur losses, as was the case with MS Surface.

Of course, for Google, this game is by no means guaranteed to lead to a win, there are many pitfalls. But suffice it to remember that the company has already prepared for a leap forward in technologies such as self-driving cars, wearable computers, and wearable electronics, which are only part of the overall trend. It can also be said that Google, without much publicity, is conducting promising developments in the field of information, managing social structures - that is, de facto trying to understand what controls our decisions, thoughts, and actions. It may sound a little fantastic, but these are quite real works that can lead to a breakthrough in this direction. The company has a huge future ahead of it, and as part of this strategy, the current alliances may sound amazing, but they are only the first steps towards something more. From a market point of view, Google is moving in the right direction and is growing its presence where it is strongest, squeezing out weak competitors.

Motorola Mobility sale to Chinese Lenovo - facts, consequences, analysis

The Lenovo-Google deal is only part of the alliances that Google is making, it is a consequence of Samsung becoming Google's main hardware partner, we talked about this in a separate article - I highly recommend reading it if you haven't already done.

Motorola's history as a manufacturer of mobile phones and smartphones actually ended in 2011, when it became known that its division responsible for these products was being bought by Google. Even though Motorola-branded products continue to hit the market, that doesn't change the fact that Motorola is unsuccessful, hurts Google, and doesn't have any impact on the market, either in sales or in ideas. In 2012, in a separate article, I described in detail the consequences of the transaction and what it will lead to, let me quote: “In August 2011, I wrote that Google was buying a very expensive laboratory to develop new services, services and products. As you know, scientists and engineers are important in the laboratory, but not marketing specialists. In the nine months that have passed since last August, Google has been thinking about what, in addition to patents, they will be able to get from this purchase. And once again it was technology. Today, many consumers, journalists and even analysts perceive the company as a manufacturer of not very successful smartphones and regular phones. This is one part of the image of Motorola Mobility that pops into the minds of most people.”

After a little recursion with references to several of my materials, I will still give a link to one of the articles, it will be interesting to read it two years later.

It doesn't fit into the mind of ordinary people that Motorola Mobility was acquired by Google for $12.5 billion and is now being sold to Lenovo for $2.91 billion. It turns out that the company lost almost 10 billion on this deal? If you use simple mathematics, then this is exactly the story, but in reality everything is somewhat more complicated.

Firstly, by acquiring Motorola Mobility, Google was also given the burden of manufacturing and developing set-top boxes and similar devices that the company did not need. The Motorola Home division was sold to the Arris Group in December 2012 for $2.35 billion and closed in April 2013.

Secondly, when buying Motorola Mobility, the company saved $1 billion in taxes, that is, the real amount of the transaction was lower.

In 2011, Google valued Motorola Mobility as follows:

  • Patents and developments - $5.5 billion;
  • Motorola brand worth $2.5 billion;
  • Motorola's net worth is $3 billion;
  • Other assets (factories, offices, etc.) - $1.55 billion

It's easy to calculate that in 2011 the real value of the purchase was $4 billion less, then subtract another $2.35 for the Home division, then $2.91 billion from the Lenovo deal. In total, we get that Google is in the "minus" by 3.24 billion dollars. But is this minus real?

With the sale of Motorola Mobility, Google retains the entire patent portfolio, which was valued at $5.5 billion two years ago, a value that has not changed over time. In addition, the most promising areas of development, talented teams of engineers and a number of small R&D centers remain at Google. Lenovo doesn't get much for its money - it's the Motorola Mobility structure, the company's main offices and a number of minor engineers working on current products, but not on the most promising developments. And here the question arises, why does Lenovo need this and what is the benefit for the Chinese company? To answer this question, we need to look at what the largest computer manufacturer in the world is today and in what direction it can develop.

Lenovo - Chinese state and private business, survival strategy

Lenovo was originally conceived as a tech start-up that received a small amount of funding from the Chinese government through one of its technology grant programs. At that time, the company had a different name, but we are not interested in this aspect of the issue under discussion. For those who want to know in detail the history of the company, as well as how it developed and became the largest PC manufacturer in the world, you can read this text in English - it describes all these issues well.

The only fact that matters to us is that the Chinese government has leverage over Lenovo and is interested in its development. The company has complete freedom in decision-making, but strategic decisions about the future of the company cannot be made without the participation of the main co-owner in the person of the Chinese state. This also prevents the company from selling itself to anyone, each expansion of the number of shareholders, changes in their shares are controlled by China.

Lenovo was able to conquer the Chinese phone market in a very short time - for this the company had all the prerequisites in the form of an existing distribution network, low cost of phones, high margins that were offered to partners. What were these phones? Devices made in countless Chinese factories that were sold under the brand name of the company. The lack of a single quality standard, a high failure rate - all this was compensated by the variety of models, their low price, which was important for this market. To some extent, we can say that Lenovo in China played the role of a large system integrator, collecting a lot of other people's developments under its wing. Lenovo, like all local players, benefited from the fact that third-generation networks are practically not developed in China, they are not mandatory, and consumers often focused on relatively cheap solutions without their support. It is low cost that rules the show in China, hence the very modest sales of smartphones against the general background of phone sales, but this market segment is growing rapidly, and in 2012 Lenovo decided to play a very active role in it. Pay attention to the percentage of smartphone sales in China and the position of the company in 2012.

According to the results of 2013, the company is among the top five world leaders in the smartphone market, taking the same fifth place (IDC data).

But the most curious thing is that 96 percent of Lenovo's sales are in its home market, that is, the company is strong only in China, while in other countries its products are almost impossible to find. In 2012, Lenovo launched its own sales in Indonesia, Russia, Ukraine - here the company's strategy was fully manifested, the emphasis on existing partners, those who already sell Lenovo products. As a rule, these are consumer electronics chains, and by no means retail, focusing on cell phones.

It is extremely important to understand that being number one in PC sales does not mean that you have the opportunity to take a significant share of the market in phones. This erroneous opinion of many manufacturers led to losses, as well as many computer retail chains tried unsuccessfully to reorient themselves to the sale of smartphones both in Russia and in other countries. Lenovo's success story in China is rather an exception, and it is in tune with the similar success of Fly in Russia, MicroMax in India - these companies fulfill the same role as Lenovo, have exactly the same strategy.

The stagnation of the PC market poses a difficult question for Lenovo - how the company will survive in the future, although today is more than fine, because sales are growing at the expense of other, less successful players who have not made the right bet on products that the market needs. Today's growth comes from eating away market share from others, not the overall growth of that market. That is, such growth is finite. After all, by wiping out or wiping out the market share of competitors, Lenovo may find that all of the PC market's problems suddenly become Lenovo's own. Apparently, the company does not want to turn into a lifetime monument to the PC market, and therefore they rushed into the smartphone segment.

In 2011-2012, Lenovo executives repeatedly said in interviews that Android is a priority for the company, it allows you to create new products in a short time, potentially selling them around the world. In 2012, the company made a strategic bet on MediaTek and its chipsets, which was important for the Chinese market, where there was competition in the cost of products.

Also in 2012, the company begins to build its own production in Wuhan, China, plans to invest about 793 million dollars in its development and modernization over five years. Initially, it was said that production would start in October 2013. It is known from various sources that the construction was completed, the equipment was placed, but so far we have not seen any phones from this factory on the market. It is possible that they are produced for the domestic market, which sounds logical. The design capacity of the factory is up to 40 million phones per year. This means that more than half of Lenovo's smartphones will be assembled in-house in 2014 (assuming that the company sold about 45.5 million in 2013 and will likely grow by 20-25 million in the current period).

Now let's take a quick look at what Lenovo's $2.91 billion acquisition of Motorola Mobility at first glance brings. The deal looks similar to buying IBM's computer business, which was losing money. At Lenovo, using a more popular brand, they were able to build their sales in the US and then in Europe - they created a strong brand that, starting from the IBM brand, has its own history and value. There is no reason to believe that a similar trick cannot be repeated with Motorola, despite the fact that the brand has depreciated in recent years, and quite a lot. You can breathe a second life into it and gain a foothold in new markets, primarily in the US market, which is focused on smartphones. Now let's take a look at what each side of the deal gets, it will be a very curious win-win situation.

Lenovo and Google are the two winning parties in the Motorola deal

During the day, I received calls from various publications asking for comments on the deal to sell Motorola Mobility, often journalists asked directly why Google bought the company for 12.5 billion and sells it so cheaply. In the first part of the article, we analyzed this question, and I think that the obvious answer sounds like this - the sale is not at all as cheap as it might seem, moreover, Google received more than they could expect. And at the same time, they got rid of the troubled asset, which brought losses (only in the third quarter of 2013, 248 million dollars). There was no need to continue layoffs, in 2012-2013 the company laid off about 6,000 employees and fulfilled huge social obligations to them.

Google is not giving away all of Motorola Mobility to Lenovo - a number of research groups remain with the company, such as the publicly announced Ara modular phone project.

All patents and developments remain with the company, they are not part of the deal. You can also say that all the key developers capable of creating next-generation technologies do not go to work at Lenovo - the Chinese company receives only ordinary engineers who are good, have vast industrial experience, but are not at all able to create brilliant products. That is, the overall technological level of the sold Motorola Mobility is greatly underestimated, the cream remains Google. And Lenovo is aware of this, as they receive many other advantages.

Google was able to increase the cost of the transaction due to the "goodies" that no one talked about as part of what was happening. These additional points cannot be directly estimated, but the CEO of the company in an interview with the Wall Street Journal said that the company plans to sell 100 million smartphones within a year after the closing of the deal. It was also stated that the company will use the Motorola brand in the US, Latin America and possibly launch in China. For China, this will apparently be a premium brand. Interestingly, Lenovo plans to write "Motorola by Lenovo" on phones. Compare this to how Motorola tried to be associated with Google in 2013.

The interview states that Lenovo has no specific plans for Motorola, but I am sure that this is not the case. You can find the full text of the interview here.

The obvious plus that Lenovo has is the potential entry into the US market, we can assume that 2.91 billion is the cost of entry. Given the phobias of the US government, it could be assumed that Lenovo would not be allowed to make such a deal, which would negatively affect the company's position. Not so long ago, Lenovo's attempt to buy Blackberry was turned down by the Canadian government for security reasons. A similar scenario could have been repeated with Motorola if Google hadn't laid straws. Part of the precaution is that all key technology and employees are removed from the sale of the company. And for the US authorities, this will be reason enough not to block the deal, unless they find some other flaws.

Another precautionary measure was the opening of Motorola's own factory in the United States, in September 2013 the company launched production in Texas, the company Flextronics, which manages the enterprise, became a partner. It is at this plant that Moto X is made, and in total this plant has created 2,500 jobs. The news was presented with great fanfare, the opening of the plant was talked about in all the American media. It was a mystery to me why it was impossible to launch an initially unprofitable enterprise, to achieve a cost of production comparable to China.The answer is very simple, this is not a political project, as I originally assumed, this is a safety valve for Lenovo. In fact, if the companies do not approve the Motorola purchase, one of the consequences will be the closure of the Texas plant, and the US government will be the reason for this closure. Not a very popular measure, is it? Google will be able to safely say that the conditions for the plant were not very good, a high tax burden, and so on. That is, they will create a cartload of problems for the US administration, which the latter does not need at all.

It also indirectly indicates that Google has been discussing a deal with Lenovo since at least the end of 2012, when the first plans for the project in Texas appeared, and it was implemented in record time based on Flextronics. Curious support for Lenovo in trying to enter the US market.

As part of the Google-Samsung alliance, the Nexus program will become less significant, in 2015 it will almost disappear, it will be replaced by products of companies with "naked" Android, analogous to today's Google Play Edition. But in 2014, Google may make a parting gift for Lenovo, bring to market under the Nexus brand, one product of the company, on which Motorola by Lenovo will already be written. Given that this will be Lenovo's first product for the US, the launch will be loud and the price of the model low enough to make the price/performance ratio amazing. It is necessary to interpret this move as an advertising campaign, such prices will not last forever, and in 2015, consumers will remember such an offer with nostalgia. I don’t know if it will be a smartphone or a tablet, but still it seems to me that it is right to bring a smartphone, that is, to create a story around a product that Lenovo is not famous for yet. Even a circulation of a million devices will create an effect for Lenovo that cannot be achieved by any marketing investment, this will be Google's help.

What can Lenovo offer in exchange for these unspoken goodies that are steaming towards a deal? Perhaps most importantly, what Google needs is another push for the US and global Chromebook market, making them a top priority for 2014. The support of the largest PC manufacturer in this business means that the entire market will go in this direction (Google already has Acer, HP, Samsung). This also automatically means a drop in sales of Windows laptops, a reduction in their share both in the world and in local markets, primarily in the USA. One of the references to Lenovo's plans for Chromebooks and summer 2014 can be found in CNet.

In terms of corporate wars, Google is consistently pushing Microsoft out of the traditional market, as well as blocking the company's attempts to enter the mobile space with Windows Phone. So far, the Google game has been successful, and the agility with which the company buys the loyalty of Microsoft's traditional partners is surprising. Let me remind you that Lenovo is one of the key partners of Microsoft in the market, which strategically went into the field of mobile devices with Google and Android. Another piece of the puzzle may be the information that starting in 2015, Samsung does not plan to release Windows laptops. This information was not confirmed by the company, but was not refuted in any way.

Short conclusion

Lenovo's purchase of Motorola becomes the last chord in the life of this manufacturer, after the deal, models developed by the engineers of this company will be released for about a year, then the focus will change, and despite the presence of the brand on the bodies of the devices, these will be completely different devices - as with ideological and design point of view. In some ways, they will have something in common with past decisions, but in general it will become a different direction. You should not regret the disappearance of Motorola, since the company died in 2011, when Google bought it and did not develop it in any way. This was a foregone conclusion, which was proved by subsequent sales of devices - the brand did not recover, it did not become attractive in the eyes of consumers. The same Moto X received extremely modest sales of half a million units in the US, these are not the numbers that can be said to be successful. Motorola is currently dropping A GOOD PRICE HOUSE FOR SALE IN KIGALI AT KANOMBE the price of this model in an attempt to sell the quantities produced.

Perhaps, that's why you should not regret Motorola, it has already left the market, and it is gone. Now let's get back to Google. The company is very active in the market - it acquires assets, creates alliances that will change the landscape of the market. The main competition will take place between Apple and Google, these two corporations are preparing to actively conquer the world. Perhaps we can assume that Apple will also look for new alliances, primarily among manufacturers of chipsets and hardware. In the coming years, a fantastic situation may arise when the hardware / software platforms launched by Google become the main consumers of chipsets, memory, which will create huge problems for Apple and other companies, the cost of their products will increase markedly. This is a very insidious move on the part of Google, which is unparalleled in the recent history of the IT business, by creating super-successful products to increase the price of components for the largest competitor.

It seems to me that Google perceives Microsoft as a second competitor, which is already more blown away and does not have any strong developments in the short term, no special efforts are directed against this company, partners are being taken away from it quietly, in working mode and without extra effort. It should be understood here that Google, simply by expanding cooperation with key Microsoft partners, is forcing the company to take production into its own hands, bear all the risks and incur losses, as was the case with MS Surface.

Of course, for Google, this game is by no means guaranteed to lead to a win, there are many pitfalls. But suffice it to remember that the company has already prepared for a leap forward in technologies such as self-driving cars, wearable computers, and wearable electronics, which are only part of the overall trend. It can also be said that Google, without much publicity, is conducting promising developments in the field of information, managing social structures - that is, de facto trying to understand what controls our decisions, thoughts, and actions. It may sound a little fantastic, but these are quite real works that can lead to a breakthrough in this direction. The company has a huge future ahead of it, and as part of this strategy, the current alliances may sound amazing, but they are only the first steps towards something more. From a market point of view, Google is moving in the right direction and is growing its presence where it is strongest, squeezing out weak competitors.

Motorola Mobility sale to Chinese Lenovo - facts, consequences, analysis

After a little recursion with references to several of my materials, I will still give a link to one of the articles, it will be interesting to read it two years later.

It doesn't fit into the mind of ordinary people that Motorola Mobility was acquired by Google for $12.5 billion and is now being sold to Lenovo for $2.91 billion. It turns out that the company lost almost 10 billion on this deal? If you use simple mathematics, then this is exactly the story, but in reality everything is somewhat more complicated.

Firstly, by acquiring Motorola Mobility, Google was also given the burden of manufacturing and developing set-top boxes and similar devices that the company did not need. The Motorola Home division was sold to the Arris Group in December 2012 for $2.35 billion and closed in April 2013.

Secondly, when buying Motorola Mobility, the company saved $1 billion in taxes, that is, the real amount of the transaction was lower.

In 2011, Google valued Motorola Mobility as follows:

  • Patents and developments - $5.5 billion;
  • Motorola brand worth $2.5 billion;
  • Motorola's net worth is $3 billion;
  • Other assets (factories, offices, etc.) - $1.55 billion

It's easy to calculate that in 2011 the real value of the purchase was $4 billion less, then subtract another $2.35 for the Home division, then $2.91 billion from the Lenovo deal. In total, we get that Google is in the "minus" by 3.24 billion dollars. But is this minus real?

With the sale of Motorola Mobility, Google retains the entire patent portfolio, which was valued at $5.5 billion two years ago, a value that has not changed over time. In addition, the most promising areas of development, talented teams of engineers and a number of small R&D centers remain at Google. Lenovo doesn't get much for its money - it's the Motorola Mobility structure, the company's main offices and a number of minor engineers working on current products, but not on the most promising developments. And here the question arises, why does Lenovo need this and what is the benefit for the Chinese company? To answer this question, we need to look at what the largest computer manufacturer in the world is today and in what direction it can develop.

Lenovo - Chinese state and private business, survival strategy

Lenovo was originally conceived as a tech start-up that received a small amount of funding from the Chinese government through one of its technology grant programs. At that time, the company had a different name, but we are not interested in this aspect of the issue under discussion. For those who want to know in detail the history of the company, as well as how it developed and became the largest PC manufacturer in the world, you can read this text in English - it describes all these issues well.

The only fact that matters to us is that the Chinese government has leverage over Lenovo and is interested in its development. The company has complete freedom in decision-making, but strategic decisions about the future of the company cannot be made without the participation of the main co-owner in the person of the Chinese state. This also prevents the company from selling itself to anyone, each expansion of the number of shareholders, changes in their shares are controlled by China.

Successes in the PC market quickly made the company a world leader, making it a major player in all countries where it had priorities, including the US market, where such players as HP and Dell are traditionally strong. The philosophy of the company, laid down by its founders, implies that not only the product is important, but also distribution channels, this is the combination that made Lenovo successful in the market.

Lenovo has never had a strong team with a strategic vision in all areas of the market, in particular the mobile device market. This is largely due to the fact that the Chinese government limits its own companies, gives them certain areas of development, creates conditions so that they do not interfere with each other and do not create excessive competition. A sound approach, which, however, does not always lead to the desired results. The company entered the mobile phone market in 2002, when it created its own division responsible for such devices. Due to excellent distribution channels in China, Lenovo phones became popular in a short time - they were distinguished by a low price, as well as low quality, which was not critical for consumers in their home market, but created problems outside the country. At that moment, the company was unable to enter foreign markets, as a result, in 2008 this division was sold for $ 100 million to a group of investors. In 2009, Lenovo Group returned the daughter, but already paid $ 200 million for it. Such illogical behavior is due to the fact that the company saw the growing influence of mobile phones and made a strategic decision to become a large manufacturer. But Lenovo was not able to compete with Huawei, ZTE and a number of other companies. The positioning of the company was such that it collected the developments of small factories and produced under its own brand - Lenovo did not have its own and strong developments, this became a weak point.

Lenovo was able to conquer the Chinese phone market in a very short time - for this the company had all the prerequisites in the form of an existing distribution network, low cost of phones, high margins that were offered to partners. What were these phones? Devices made in countless Chinese factories that were sold under the brand name of the company. The lack of a single quality standard, a high failure rate - all this was compensated by the variety of models, their low price, which was important for this market. To some extent, we can say that Lenovo in China played the role of a large system integrator, collecting a lot of other people's developments under its wing. Lenovo, like all local players, benefited from the fact that third-generation networks are practically not developed in China, they are not mandatory, and consumers often focused on relatively cheap solutions without their support. It is low cost that rules the show in China, hence the very modest sales of smartphones against the general background of phone sales, but this market segment is growing rapidly, and in 2012 Lenovo decided to play a very active role in it. Pay attention to the percentage of smartphone sales in China and the position of the company in 2012.

The stagnation of the PC market poses a difficult question for Lenovo - how the company will survive in the future, although today is more than fine, because sales are growing at the expense of other, less successful players who have not made the right bet on products that the market needs. Today's growth comes from eating away market share from others, not the overall growth of that market. That is, such growth is finite. After all, by wiping out or wiping out the market share of competitors, Lenovo may find that all of the PC market's problems suddenly become Lenovo's own. Apparently, the company does not want to turn into a lifetime monument to the PC market, and therefore they rushed into the smartphone segment.

In 2011-2012, Lenovo executives repeatedly said in interviews that Android is a priority for the company, it allows you to create new products in a short time, potentially selling them around the world. In 2012, the company made a strategic bet on MediaTek and its chipsets, which was important for the Chinese market, where there was competition in the cost of products.

Also in 2012, the company begins to build its own production in Wuhan, China, plans to invest about 793 million dollars in its development and modernization over five years. Initially, it was said that production would start in October 2013. It is known from various sources that the construction was completed, the equipment was placed, but so far we have not seen any phones from this factory on the market. It is possible that they are produced for the domestic market, which sounds logical. The design capacity of the factory is up to 40 million phones per year. This means that more than half of Lenovo's smartphones will be assembled in-house in 2014 (assuming that the company sold about 45.5 million in 2013 and will likely grow by 20-25 million in the current period).

Now let's take a quick look at what Lenovo's $2.91 billion acquisition of Motorola Mobility at first glance brings. The deal looks similar to buying IBM's computer business, which was losing money. At Lenovo, using a more popular brand, they were able to build their sales in the US and then in Europe - they created a strong brand that, starting from the IBM brand, has its own history and value. There is no reason to believe that a similar trick cannot be repeated with Motorola, despite the fact that the brand has depreciated in recent years, and quite a lot. You can breathe a second life into it and gain a foothold in new markets, primarily in the US market, which is focused on smartphones. Now let's take a look at what each side of the deal gets, it will be a very curious win-win situation.

Lenovo and Google are the two winning parties in the Motorola deal

During the day, I received calls from various publications asking for comments on the deal to sell Motorola Mobility, often journalists asked directly why Google bought the company for 12.5 billion and sells it so cheaply. In the first part of the article, we analyzed this question, and I think that the obvious answer sounds like this - the sale is not at all as cheap as it might seem, moreover, Google received more than they could expect. And at the same time, they got rid of the troubled asset, which brought losses (only in the third quarter of 2013, 248 million dollars). There was no need to continue layoffs, in 2012-2013 the company laid off about 6,000 employees and fulfilled huge social obligations to them.

Google is not giving away all of Motorola Mobility to Lenovo - a number of research groups remain with the company, such as the publicly announced Ara modular phone project.

All patents and developments remain with the company, they are not part of the deal. You can also say that all the key developers capable of creating next-generation technologies do not go to work at Lenovo - the Chinese company receives only ordinary engineers who are good, have vast industrial experience, but are not at all able to create brilliant products. That is, the overall technological level of the sold Motorola Mobility is greatly underestimated, the cream remains Google. And Lenovo is aware of this, as they receive many other advantages.

Google was able to increase the cost of the transaction due to the "goodies" that no one talked about as part of what was happening. These additional points cannot be directly estimated, but the CEO of the company in an interview with the Wall Street Journal said that the company plans to sell 100 million smartphones within a year after the closing of the deal. It was also stated that the company will use the Motorola brand in the US, Latin America and possibly launch in China. For China, this will apparently be a premium brand. Interestingly, Lenovo plans to write "Motorola by Lenovo" on phones. Compare this to how Motorola tried to be associated with Google in 2013.

The interview states that Lenovo has no specific plans for Motorola, but I am sure that this is not the case. You can find the full text of the interview here.

The obvious plus that Lenovo has is the potential entry into the US market, we can assume that 2.91 billion is the cost of entry. Given the phobias of the US government, it could be assumed that Lenovo would not be allowed to make such a deal, which would negatively affect the company's position. Not so long ago, Lenovo's attempt to buy Blackberry was turned down by the Canadian government for security reasons. A similar scenario could have been repeated with Motorola if Google hadn't laid straws. Part of the precaution is that all key technology and employees are removed from the sale of the company. And for the US authorities, this will be reason enough not to block the deal, unless they find some other flaws.

Another precautionary measure was the opening of Motorola's own factory in the United States, in September 2013 the company launched production in Texas, the company Flextronics, which manages the enterprise, became a partner. It is at this plant that Moto X is made, and in total this plant has created 2,500 jobs. The news was presented with great fanfare, the opening of the plant was talked about in all the American media. It was a mystery to me why it was impossible to launch an initially unprofitable enterprise, to achieve a cost of production comparable to China. The answer is very simple, this is not a political project, as I originally assumed, this is a safety valve for Lenovo. In fact, if the companies do not approve the Motorola purchase, one of the consequences will be the closure of the Texas plant, and the US government will be the reason for this closure. Not a very popular measure, is it? Google will be able to safely say that the conditions for the plant were not very good, a high tax burden, and so on. That is, they will create a cartload of problems for the US administration, which the latter does not need at all.

It also indirectly indicates that Google has been discussing a deal with Lenovo since at least the end of 2012, when the first plans for the project in Texas appeared, and it was implemented in record time based on Flextronics. Curious support for Lenovo in trying to enter the US market.

As part of the Google-Samsung alliance, the Nexus program will become less significant, in 2015 it will almost disappear, it will be replaced by products of companies with "naked" Android, analogous to today's Google Play Edition. But in 2014, Google may make a parting gift for Lenovo, bring to market under the Nexus brand, one product of the company, on which Motorola by Lenovo will already be written. Given that this will be Lenovo's first product for the US, the launch will be loud and the price of the model low enough to make the price/performance ratio amazing. It is necessary to interpret this move as an advertising campaign, such prices will not last forever, and in 2015, consumers will remember such an offer with nostalgia. I don’t know if it will be a smartphone or a tablet, but still it seems to me that it is right to bring a smartphone, that is, to create a story around a product that Lenovo is not famous for yet. Even a circulation of a million devices will create an effect for Lenovo that cannot be achieved by any marketing investment, this will be Google's help.

What can Lenovo offer in exchange for these unspoken goodies that are steaming towards a deal? Perhaps most importantly, what Google needs is another push for the US and global Chromebook market, making them a top priority for 2014. The support of the largest PC manufacturer in this business means that the entire market will go in this direction (Google already has Acer, HP, Samsung). This also automatically means a drop in sales of Windows laptops, a reduction in their share both in the world and in local markets, primarily in the USA. One of the references to Lenovo's plans for Chromebooks and summer 2014 can be found in CNet.

In terms of corporate wars, Google is consistently pushing Microsoft out of the traditional market, as well as blocking the company's attempts to enter the mobile space with Windows Phone. So far, the Google game has been successful, and the agility with which the company buys the loyalty of Microsoft's traditional partners is surprising. Let me remind you that Lenovo is one of the key partners of Microsoft in the market, which strategically went into the field of mobile devices with Google and Android. Another piece of the puzzle may be the information that starting in 2015, Samsung does not plan to release Windows laptops. This information was not confirmed by the company, but was not refuted in any way.

Short conclusion

Lenovo's purchase of Motorola becomes the last chord in the life of this manufacturer, after the deal, models developed by the engineers of this company will be released for about a year, then the focus will change, and despite the presence of the brand on the bodies of the devices, these will be completely different devices - as with ideological and design point of view. In some ways, they will have something in common with past decisions, but in general it will become a different direction. You should not regret the disappearance of Motorola, since the company died in 2011, when Google bought it and did not develop it in any way. This was a foregone conclusion, which was proved by subsequent sales of devices - the brand did not recover, it did not become attractive in the eyes of consumers. The same Moto X received extremely modest sales of half a million units in the US, these are not the numbers that can be said to be successful. Motorola is currently discounting A GOOD PRICE HOUSE FOR SALE IN KIGALI AT KANOMBE the price of this model in an attempt to sell the quantities produced.

The purchase of Motorola by Lenovo becomes the last chord in the life of this manufacturer, after the deal, models developed by the engineers of this company will be released for about a year, then the focus will change, and despite the presence of the brand on the bodies of the devices, these will be completely different devices - both ideologically and and design point of view. In some ways, they will have something in common with past decisions, but in general it will become a different direction. You should not regret the disappearance of Motorola, since the company died in 2011, when Google bought it and did not develop it in any way. This was a foregone conclusion, which was proved by subsequent sales of devices - the brand did not recover, it did not become attractive in the eyes of consumers. The same Moto X received extremely modest sales of half a million units in the US, these are not the numbers that can be said to be successful. Motorola is currently dropping A GOOD PRICE HOUSE FOR SALE IN KIGALI AT KANOMBE A GOOD PRICE HOUSE FOR SALE IN KIGALI AT KANOMBE the price of this model in an attempt to sell the quantities produced.

Of course, for Google, this game is by no means guaranteed to lead to a win, there are many pitfalls. But suffice it to remember that the company has already prepared for a leap forward in technologies such as self-driving cars, wearable computers, and wearable electronics, which are only part of the overall trend. It can also be said that Google, without much publicity, is conducting promising developments in the field of information, managing social structures - that is, de facto trying to understand what controls our decisions, thoughts, and actions. It may sound a little fantastic, but these are quite real works that can lead to a breakthrough in this direction. The company has a huge future ahead of it, and as part of this strategy, the current alliances may sound amazing, but they are only the first steps towards something more. From a market point of view, Google is moving in the right direction and is growing its presence where it is strongest, squeezing out weak competitors.