• by Donnovan Andrews , February 3, 2014

There have been huge recent developments in mobile, including Wednesday's news that Google is selling its Motorola handset unit to Lenovo for $2.91B. Per WSJ, Google will get $660M in cash up front and $750M in Lenovo shares; Lenovo has three years to pay the remaining $1.5B.

It's a financial loss for Google, which paid $12.5B for Motorola Mobility in 2012; however, in the process of trying the outcome is not as binary as a win or a loss… in this case the outcomes were learnings, patents, a committed Android partner and more.

The decision to divest Moto comes with several upsides. Ridding itself of Moto enables Google to focus on its flagship Android OS that dominates the world's smartphone market. 

And Google is coming out on the other side with a much better understanding of hardware from the experience. Plus, it's keeping the coolest component: Motorola's Advanced Technology group, which includes the Project Ara modular phone – which will benefit from Android's scalability and Google's resources. Per Motorola's blog, Ara’s  focused on developing an evolving, open hardware platform enabling consumers to customize their phones’ materials, functionality and cost: “We want to do for hardware what the Android platform has done for software: create a vibrant third-party developer ecosystem, lower the barriers to entry, increase the pace of innovation, and substantially compress development timelines.”  

Perhaps the biggest plus for Google in all of this: retaining a big chunk of Motorola's patent portfolio, including key parts of industry-wide techs (like the standards for GSM , WiFi and more). This patent/applications treasure trove gained from the 2012 purchase – I have seen reports ranging from 17K-24K patents -- should provide nice licensing income, and helps protect Google from other device/software makers' intrusions and involvement, in at least some future patent wars…

Onward… Google's recent Nest purchase is an indication that it is turning attention more toward mission-aligning tech (e.g., connected devices) that will change the world. In an email, about the Motorola un-deal, Larry Page indicated as much: “As a side note, this does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry. We are excited by the opportunities to build amazing new products for users within these emerging ecosystems."

Now, before I make it look like Lenovo took a sucker bet buying Motorola’s handset biz: it did not. During its Google partnership, Motorola released some really good phones, including the well-reviewed (if not well-purchased) Moto X. The foothold in the U.S. devices market will help Lenovo, a Chinese firm that has cobbled together U.S. consumer electronics business units (e.g., IBM's PC biz in 2005) to become a top player in mobile and computing.

There are so many questions that remain…

Will Lenovo keep producing the Moto X? Will production move from the US to China?

Will Lenovo keep the Motorola brand? In the US and Europe?

Will there be an agency search or will activities roll into Lenovo?

What develops in coming days from Google, Lenovo and Motorola… should be interesting.