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Why the Motorola acquisition gives Lenovo a fighting chance to spread its smartphone influence

On 6 September 2012, the tech press was invited to a Motorola event. It was the first presentation the company had given since Google had acquired it in May 2012. During the presentation we were told to expect a bold new company emerging from the ashes of what we had come to know as Motorola. The phrase “The New Motorola” was repeated by Eric Schmidt and Dennis Woodside as they stood together on stage and told all of us how amazing and different things were going to be moving forward.

Looking back at that presentation in the context of today, with Google now in the process of selling most of what is left of Motorola to Lenovo, things feel quite a bit different. Previously, I and many others thought Google was going to wield Motorola as a force to reign in the Android platform. Now it seems the company was only really interested in harvesting the organs from what was soon to be a corpse.

If you’re the type to mourn the loss of an American company that was going to self-destruct anyway, this is a sad day. If you’re like me and see how Google not only gave Lenovo a fighting chance in the US but created some incredible opportunities for itself, the future of the mobile industry just got a bit more interesting.

A bit of Motorola history

It’s important to remember through all of this that Motorola was on its way out the door when Google purchased the company. Motorola wasn’t doing well and hadn’t made a successful Android phone since the original Droid. Its long shot at attracting enterprise customers with the Motorola Atrix and its laptop dock monstrosity had failed about as gracelessly as possible, and their MotoACTV smartwatch and fitness band line quickly dropped into obscurity after launch. Motorola was haemorrhaging money and seemed fresh out of new ideas.

Google didn’t just buy Motorola, they fixed it. Google execs sold off the set-top box part of the company, started making huge cuts to the workforce, and moved over a significant group of Google employees to work in various departments within Motorola. The new team breathed new life into the Advanced Technology and Projects group (ATAP) at Motorola, and started working hard on creating a software solution that fell in line with Google’s ideals thanks to Google’s Punit Soni among others. With the launch of the Moto X and Moto G phones they had hardware and software that were capable of amazing things, even if they weren’t blockbuster commercial successes.

Motorola isn’t even close to the same company it was when Google purchased the firm, and more importantly they now have the tools and a forward plan to continue making positive strides when it comes to smartphones and tablets. All they need is someone willing to bankroll the next big idea. Someone willing to stand back and let them do their thing, who is in desperate need of a carrier relationship or two in the US.

Who better than Lenovo – the only PC manufacturer who is actually growing as a result of its impressive business practices and dedication to trying new things?

Dividing the riches

Saying that Google is selling Motorola to Lenovo is awkward, since it’s only sort of true. Motorola has been harvested for its resources, and Lenovo is being offered the part of the company that designs phones and builds user interfaces. They are being offered staff, buildings, resources, and a substantial presence in the US that already has a great relationship with at least one of the major US carriers.

Verizon’s Droid line may feel like a relic of a former age in a world where Android phones are being made to be identical across every carrier, but that relationship is unlikely to go away anytime soon. If the deal is approved Lenovo will have effectively bought their way into the US mobile ecosystem, complete with a shiny new partially empty factory in Texas.

Lenovo has a history of not messing with the things they purchase, but instead just filling the coffers so they can keep making cool things. If this holds true for Motorola, it will mean new phones with Active Display and all of the totally unique Moto X features, as well as regular and consistent software updates both to individual apps and the OS itself. That would be a tremendous thing for Lenovo, who currently has the one-two punch of lacklustre phones and terrible software update schedules. If Motorola gets absorbed into Lenovo and the company is smart enough to keep the good stuff about their recent work around, it can only be good for consumers.

There’s still quite a bit of Motorola that Google is keeping. First and foremost is the insanely large war chest of patents that Motorola holds as a result of being the first mobile phone company. Whether or not those patents exist to defend or attack isn’t totally relevant. The important part is that Google is keeping them, and is sharing them with Lenovo by way of licensing agreement. It’s possible that Google made Samsung aware of this deal, which would help explain the new 10-year agreement that those two companies now enjoy as well. These agreements give Google considerable influence, which is great for everyone that likes the Android experience as dictated by Google.

The ATAP lab’s recent antics include the Project Ara smartphone concept, the Spotlight Stories augmented reality concept, and the recent addition of interaction master Ivan Poupyrev for a yet unannounced project. The group also has their hands in 3D printing projects and several other things, and now all of that belongs to Google. That team will now become a part of the Android team at Google, which hopefully means that at least some of these really cool projects will stick around.

Knowing the Android team has access to the heavy design and interaction focused teams that are a part of ATAP is exciting though, especially if some of that works its way into future versions of the OS.

Convince us this is a good thing

Lenovo is going to have to work hard to sell this to us, especially given their poor mobile history so far. Motorola got a lot of attention over the last two years because it was owned by Google. There was a ton of speculation about Motorola making a Nexus phone, about Google becoming its own hardware manufacturer, and about the future of Android altogether. It turns out none of that was ever true, and now Lenovo owns a smartphone company with a lot of hype and two phones that are really cool but have had very little success out in the wild. That means Lenovo’s next launch with Motorola will be a single window of opportunity to either impress or fail, and if it fails there’s good chance the company’s mobile efforts will drift right back into obscurity.

Meanwhile Google now owns a huge cache of patents that the company has already used to its advantage, and one of the most impressive mobile R&D groups out there today. Fiscally speaking, whether or not it was a good idea to buy a dying company for $12.4 billion only to harvest the parts you like and sell the rest for $2.24 billion and $2.91 billion is an argument for someone else to tackle. What we know for sure is Google has some powerful new tools under its belt now, and that should excite anyone interested in seeing what the company does next.

For another viewpoint, see: Will Lenovo’s acquisition turn Motorola into a bland smartphone maker?