IE Focus | By Enrique Dans, Professor at IE Business School
Google bought Motorola for 12.5 billion dollars, invested in it to make it competitive and then sold it for 2.91 million, keeping its patent portfolio. A tale of success or failure?
Google has sold its Motorola mobile phone business to Lenovo for 2.91 billion dollars, thereby demonstrating that hardware, although it plays a crucial role in strategy development, is seen by the company as being a factor that is somewhere between marginal and accidental.
Google’s acquisition of Motorola was one of the biggest surprises of the summer of 2011. Google paid 12.5 billion for a legendary manufacturer that had come down in the world, but which had a massive portfolio of patents that could be fundamental in navigating the complex scenario of litigations the company was thinking of launching at the time.
Moreover, the acquisition posed a problem. If Google’s strategy with Android was to make itself attractive to all Smartphone producers, how would said producers feel about the fact that the company that was selling them something as vital as an operating system would also be competing against them through its own newly acquired handset manufacturer? Becoming a mobile phone manufacturer was a dangerously incoherent move by Google.