News / Economy

China's Lenovo Buys Google's Smart Phone Business

New Lenovo Vibe X smartphones displayed at IFA, one of the world's largest trade fairs for electronics and electrical appliances, Berlin, Sept. 5, 2013.
New Lenovo Vibe X smartphones displayed at IFA, one of the world's largest trade fairs for electronics and electrical appliances, Berlin, Sept. 5, 2013.
VOA News
China's fast-growing Lenovo Group technology business is buying the troubled smartphone manufacturing division owned by Google, the giant U.S. Internet company.
 
Lenovo, already the world's biggest personal computer maker, is paying $2.9 billion for Google's Motorola Mobility handset-making operation. But the search engine is retaining rights to almost all of the 17,000 patents connected to the phones.
 
Google kept the patent rights so it could continue to control technology licensed to phone makers who use Google's Android software, which powers the majority of the world's smartphones.
 
The deal is tentative pending approval from U.S. regulators. In recent years, the U.S. government has approved the sale of some American corporations to Chinese businesses, while blocking others, largely on grounds that the sales threatened U.S. security in various ways. Lenovo says it does not expect problems getting the deal approved.
 
The sales price marks a failed effort by Google to enter the competitive smartphone business. Google paid $12.5 billion for Motorola in mid-2012, although that deal came with $3 billion in cash and Google sold the company's television set-top box business for $2.3 billion.     
 
The world's smartphone market is dominated by South Korea's Samsung and U.S.-based Apple, with Lenovo third if the deal is completed.
 
Google's share while owning Motorola dropped from 2.3 percent to about 1 percent last year.

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Comments
     
by: MikeBarnett from: USA
January 31, 2014 3:42 PM
For 12.5 years, the US has been blowing up US computers, cell phones, and digital cameras, the basic components of smart munitions. The US has destroyed more components in its ground and air vehicles that have operated at enormous temperature extremes, from Afghanistan to the Middle East, that are not healthy for electronic components. It is hard to compete in manufacturing and selling products if wars destroy the parts.

In addition, China has rare earths deposits inside China, so the mining and manufacturing can occur in fewer places that lower costs for transportation. If Google retains the patents, a US firm can continue to profit from Lenovo's production, distribution, and sales of finished products. Both companies and countries should profit.

by: Sino-phobia from: Rest of the world
January 31, 2014 6:27 AM
China is trying to buy all the advanced US companies with its bubble money. I'm scared about what happens after its bubble economy collapses. Chinese shadow banking system has already issued approximately 4 trillion US bucks, which correspond to about 55% of Chinese annual GDP. Oh! Bless China!

by: Yasukuni from: Japan
January 30, 2014 12:05 PM
you mean the "People Liberation Terrorist Organization Army" Lenovo is buying the manufacturing division owned by Google... Yeah, that makes me feel real safe... Chinese are toxic in any form..!!

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