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Why Google Sold Motorola – Still a big question

Why Google sold Motorola – Still a mystery for Mobile Analysts Motorola Nexus

This question is been in mind for so many months, finally decided to do a small research on Google. After reading so many Articles and Theories, still, I could not find a logical reason to my question.

I could possibly find out certain reasons, valid or no, I dont know, so decided to ask Consumers , what they feel.

For sure, Its not just simple mathematical calculation of profit and loss. This is a long Term Strategical move to sustain ” Android ” and in my opinion to revive Motorola Brand.

Lets go back to Google purchase. Google purchased Motorola for 12.5 B $ and sold Mobility to Lenovo for 3 B $ ( Except patents ). After reading Interview of Don Harrison, Head of M&A, Google, I realized, Actual mathematics is totally different. Selling Home division for 2.5 B $. Mobile Division 3 B $, 3 B $ Cash ( slightly questionable whether its actual cash or stock or in market ). Taking tax benefits, Final cost of patents come to around 3 B $, Far cheaper than Nortel Deal.

http://fortune.com/2014/02/12/a-peek-at-googles-ma-ambitions/

But, key question , why to sell a Brand name when it can be turned into a profitable venture ??

Lets, link Motorola Mobile with Nexus. Since start, Google was relying on Android OS. Nexus is branded under Google name but manufactured by 3rd party. Nexus 4 & 5, made by LG Electronics. Big big hit in market and overwhelming response by consumers. Always in shortage, neither Google nor LG could predict the success of Nexus.

Common point  in Motorola and LG , Google.  

Does it mean, Google realized very early that Running Mobile Business means getting in each and every module of it starting from procurement to manufacturing to testing and distribution. In Google words,

Android is definitely bbenefiting from Motorola deal in terms of innovation and better pricing. This is a fact, With Nexus 4, pricing of premium phones was broken. Another point is protecting Android Ecosystem ( i am Still doing research on this ).

HTC Dream

HTC First Android Mobile

Motorola was one of the members of Open Handset Alliance and also one of the early adapters of Android. Early adapters reminds me of HTC Dream Mobile which was launched commercially on Android 1.0

http://www.google.com/press/motorola/

Conclusion, Why Google is No. 1 company, It proved well by stepping in Mobiles without manufacturing Mobile Handsets. A smart move by a No. 1 Smart company. Google has been very successful in providing a platform and mobile which can give freedom of thought to consumer as well as Manufacturers.

What next for Google

1. How to carry forward Nexus series after Nexus 6  ?

2. Counter measures for other upcoming platforms

 

3. Another venture ? Cameras !!!

Later, I plan to develop a case Study on ” Google Mobile Business ” in terms of Strategy, New Venture and most important Brand Building.

** Please read about Android Inc., How Google started Android Platform.

 

 

 

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Rakesh Bhatia

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