Lenovo to buy Google's Motorola handset division(reuters.com)
reuters.com
Lenovo to buy Google's Motorola handset division
http://www.reuters.com/article/2014/01/29/us-google-lenovo-idUSBREA0S1YN20140129
264 comments
Smart move from Google, they remove the possibility of being suspected of favoritism. And I suppose they keep the patents, which is what they were really interested in all along.
I don't know how anyone can see selling off a company for $9.5 billion less than you paid for it two years ago as a "smart move". It is prudent to get rid of Motorola now before it eats up even more cash, but the smart thing would have been to never buy the company in the first place.
I agree. Don't care how much money you have or are making annual, but losing 9.5 billion in TWO years doesn't look good.
What's google thinking?
As noted a half dozen times throughout the comments, they didn't lose 9.5 billion, it's looking more like possibly 2 billion.
But they also had a strong bargaining chip vs Samsung, and will likely reap benefits far exceeding their Moto stake.
My comment was way early in the thread so the dozens of comments saying they didn't lose 9.5 billion didn't exist yet when I posted...
Still, it's a strange/not-so-great move on google's part.
It's sad how a once mighty company is being sold around like a piece of house by some property flippers, and costing the flipper pretty 2 billion too...
Still, it's a strange/not-so-great move on google's part.
It's sad how a once mighty company is being sold around like a piece of house by some property flippers, and costing the flipper pretty 2 billion too...
Article says it includes "certain patents".
My guess is that Google and Samsung have come to some arrangement that will bring them closer. Perhaps Samsung gets more engineers working on Android directly, perhaps Samsung drops S-Voice and some of its proprietary stuff.
Any word on if phones will still be assembled in US? Some Moto X models are today.
They're keeping the patents, right?
Almost certainly. Still, surely the patents aren't worth $9B are they?
The article suggests that 10,000 patents are part of the deal. I'm not sure if that's the same number as were originally purchased, but I have to think it's the lion's share of them.
I see 'certain patents'. I don't see a reason to read a number out of that.
It's from China Daily: "The acquisition, worth at least $2 billion, will include more than 10,000 mobile communications patents currently held by the United States company, according to a person familiar with the matter." [1]
Wikipedia said of the original Google purchase: "Motorola Mobility has 17,000 patents with 7,500 more patents pending."
[1] http://usa.chinadaily.com.cn/2014-01/30/content_17265533.htm
Wikipedia said of the original Google purchase: "Motorola Mobility has 17,000 patents with 7,500 more patents pending."
[1] http://usa.chinadaily.com.cn/2014-01/30/content_17265533.htm
You're right, I was looking at a different article. Source for the 10,000 number is below.
http://usa.chinadaily.com.cn/2014-01/30/content_17265533.htm
http://usa.chinadaily.com.cn/2014-01/30/content_17265533.htm
I'm sure there's something in the deal for Google to at least retain rights to use the patents. Likewise Lenovo wouldn't buy Motorola without the patents.
Most likely cross license with Google staying as the owner of the patents.
very strange decision by google
They're probably worth more than that for Google if they are make-or-break for Android.
Step 1: Buy Motorola Mobility
Step 2: Firewall the two companies
Step 3: Extract patents from Motorola through the firewall
Step 4: Profit???
Step 2: Firewall the two companies
Step 3: Extract patents from Motorola through the firewall
Step 4: Profit???
And to think that they've just released the MotoX, and now this.
I was so close to buying one, I'm going to have to hold off now.
Huge announcement if true, and if this accounts for the entirety of the Motorola purchase that Google made.
That means that in less than two years, Google shredded 85% of the $13bn paid for Motorola. At the time, the high price paid was excused for the patents, because the business itself did not generate nearly enough earnings to justify the price. Now, if it is true that the patents are part of the deal (the article states they are), it's proof that these did not have nearly the value anticipated.
It's also a big statement on Google's ability to succeed in the hardware market, where they've never seemed to be able to gain real success despite their attempts with notebooks and phones.
Edit: the article states the deal would include more than 10,000 patents. Originally Motorola was estimated to have 17,000 patents at the time of its purchase by Google. So while this is still speculation, and we do not know full details, there's a good chance Google may have cherry-picked the patents they felt were important to retain.
Follow-up edit: the 10,000 patent number comes from this article: http://usa.chinadaily.com.cn/2014-01/30/content_17265533.htm
Edit 3: The value destruction here isn't so bad as 85%. See Magicalist's comment below for a good summary - Google picked up a lot of cash, tax loss assets, and $2.2bn from the sale of one of Motorola's subsidiary businesses as part of that $13bn original purchase price. Still a loss but not as dramatic as the headline number.
That means that in less than two years, Google shredded 85% of the $13bn paid for Motorola. At the time, the high price paid was excused for the patents, because the business itself did not generate nearly enough earnings to justify the price. Now, if it is true that the patents are part of the deal (the article states they are), it's proof that these did not have nearly the value anticipated.
It's also a big statement on Google's ability to succeed in the hardware market, where they've never seemed to be able to gain real success despite their attempts with notebooks and phones.
Edit: the article states the deal would include more than 10,000 patents. Originally Motorola was estimated to have 17,000 patents at the time of its purchase by Google. So while this is still speculation, and we do not know full details, there's a good chance Google may have cherry-picked the patents they felt were important to retain.
Follow-up edit: the 10,000 patent number comes from this article: http://usa.chinadaily.com.cn/2014-01/30/content_17265533.htm
Edit 3: The value destruction here isn't so bad as 85%. See Magicalist's comment below for a good summary - Google picked up a lot of cash, tax loss assets, and $2.2bn from the sale of one of Motorola's subsidiary businesses as part of that $13bn original purchase price. Still a loss but not as dramatic as the headline number.
They shredded closer to a sixth of the initial price less whatever IP benefit they received.
Motorola had ~$3B in cash when acquired. Google previously sold their set-top box unit for $2.35B and realized about $1.7B in tax benefits from previous losses. However since acquiring it has taken $1.038B in losses, which is $0.67B post-tax. There will be another write down for the lost goodwill less the value of the remaining IP that should be worth very approximately $1B. So including the $3B from Lenovo, they recouped approximately $10.4B of the initial $12.5B purchase price.
Edit: Previous version excluded cash.
Motorola had ~$3B in cash when acquired. Google previously sold their set-top box unit for $2.35B and realized about $1.7B in tax benefits from previous losses. However since acquiring it has taken $1.038B in losses, which is $0.67B post-tax. There will be another write down for the lost goodwill less the value of the remaining IP that should be worth very approximately $1B. So including the $3B from Lenovo, they recouped approximately $10.4B of the initial $12.5B purchase price.
Edit: Previous version excluded cash.
Tim Worstall believes they may have come out ahead on the deal overall: http://www.theregister.co.uk/2014/01/30/google_motorola_mobi...
I want to know how long it took you to gather all the figures? and Where you collect them? I am currently working on a platform that help people become better investors. I found your analysis amazingly informative and concise! Thanks!
Quarterly and annual reports. The prospectus for the original sale. These are all public companies so the reports are on record.
Before you start coding or starting a project on this kind of thing please read up on how a company goes public and the reporting requirements and where these things are filed. Also talk to someone in the industry and pick their brain.
I'm in Canada and a requirement for even doing something like business reporting for media is a CSC certificate, which qualifies you for basic knowledge of the securities industry, how to read annual reports and ledgers. Please do the same type of research for the territories and/or countries that you are thinking of working in.
It'll make your projecy more successful.
Before you start coding or starting a project on this kind of thing please read up on how a company goes public and the reporting requirements and where these things are filed. Also talk to someone in the industry and pick their brain.
I'm in Canada and a requirement for even doing something like business reporting for media is a CSC certificate, which qualifies you for basic knowledge of the securities industry, how to read annual reports and ledgers. Please do the same type of research for the territories and/or countries that you are thinking of working in.
It'll make your projecy more successful.
For example many of these types of documents are filed on sedar in Canada and on Edgar in the us. If these terms don't mean anything to you then you should read up on them.
You can find 10k and 10q statements through Edgar, in rendered form as well as XBRL documents which describe a hypercube. Warren Buffet also has a good book about how he reads P&L statements.
You should be able to read the 10K and 10Q for such type of information.
You have included cash which Motorola had when getting acquired but have conveniently ignored their short term debts (current liabilities) which they were liable to pay. A better number to look at is net working capital.
You're absolutely right that one needs to adjust for short-term liabilities since some of that cash would have gone to pay them (Longer-term liabilities would likely continue on to Lenovo). As big a question in this case is the amount of cash that will be in Motorola when Lenovo acquires it and was in their set-up box business when it was sold.
Unfortunately, the comment isn't editable so I'll add more detail here. The more accurate number is $3.32B in cash and equivalents less ($3.57B in current liabilities - $2.97 in current non-cash assets). This totals $2.72B.
However, I understated the tax benefit. Motorola had a $2.5B reserve against their tax assets since they weren't profitable, which is $0.8B less than my original estimate. So the total error from these two items is an understatement of Google's recoveries by $0.52B, which means they recovered about $10.9B of $12.5B.
Note that there are likely other errors still present in this new calculation due to both lack of information and less than thorough research.
Unfortunately, the comment isn't editable so I'll add more detail here. The more accurate number is $3.32B in cash and equivalents less ($3.57B in current liabilities - $2.97 in current non-cash assets). This totals $2.72B.
However, I understated the tax benefit. Motorola had a $2.5B reserve against their tax assets since they weren't profitable, which is $0.8B less than my original estimate. So the total error from these two items is an understatement of Google's recoveries by $0.52B, which means they recovered about $10.9B of $12.5B.
Note that there are likely other errors still present in this new calculation due to both lack of information and less than thorough research.
Is any cash / tax benefits being passed over with the business as it's sold?
The other question I suspect is how many, and which, of the patents are being passed over.
The other question I suspect is how many, and which, of the patents are being passed over.
85% loss on the deal? - No
http://dealbook.nytimes.com/2014/01/29/did-google-really-los...
.. considering 1. Motorola had cash on hand and tax credits worth $3B. 2. Google sold Motorola's STB business for $2.4B to Arris. 3. It valued the acquired Motorola patents at $5.5B.
Considering #3 is overvalued by 100%, it still comes to a loss of about $2b. But the gains would not be just monetary as Google now has a patent portfolio to be a stronger player in the smartphones business, and has had a say in the organization of the smartphones hardware segment which it can leverage.
.. considering 1. Motorola had cash on hand and tax credits worth $3B. 2. Google sold Motorola's STB business for $2.4B to Arris. 3. It valued the acquired Motorola patents at $5.5B.
Considering #3 is overvalued by 100%, it still comes to a loss of about $2b. But the gains would not be just monetary as Google now has a patent portfolio to be a stronger player in the smartphones business, and has had a say in the organization of the smartphones hardware segment which it can leverage.
> It's also a big statement on Google's ability to succeed in the hardware market, where they've never seemed to be able to gain real success despite their attempts with notebooks and phones.
And Google TV. Let's not forget that huge failure.
"By the summer of 2012, the majority of the televisions you see in stores will have Google TV embedded in it." -Eric Schmidt
And Google TV. Let's not forget that huge failure.
"By the summer of 2012, the majority of the televisions you see in stores will have Google TV embedded in it." -Eric Schmidt
A year off and the name is different, but Chromecast has redefined the way I think about 'Smart TVs' and HTPCs.
Google's long game still looks good in this area, IMO.
Google's long game still looks good in this area, IMO.
I'll explain my Chromecast experience simply: We are either using Chromecast in my house, or DirecTV.
When we want to watch Netflix, HBOGO, or something on Plex, we fire up a phone or tablet, open the app, and Cast it to the TV. The Chromecast automatically switches the input and begins playing what we asked it to.
@Loki540 - You might be referring to the still in development Chrome extension. We don't use that much but I hear it has to be on a very solid wireless connection. Chromecast-ready apps do not have that problem.
@yetfeo - It only costs 30 dollars, and any app can choose to be a 'Chromecast' app by adding in their API. Our iPads and Android devices all can use the Chromecast and the variety of things we can do with it is superior.
When we want to watch Netflix, HBOGO, or something on Plex, we fire up a phone or tablet, open the app, and Cast it to the TV. The Chromecast automatically switches the input and begins playing what we asked it to.
@Loki540 - You might be referring to the still in development Chrome extension. We don't use that much but I hear it has to be on a very solid wireless connection. Chromecast-ready apps do not have that problem.
@yetfeo - It only costs 30 dollars, and any app can choose to be a 'Chromecast' app by adding in their API. Our iPads and Android devices all can use the Chromecast and the variety of things we can do with it is superior.
Yeah, Chromecast is pretty amazing. I bought one and everyone in my family who has been over to see it has purchased one as well.
Just curious - what do you usually use Chromecast for? I got it specifically to stream Youtube on my TV, and found that there was usually a > 1 second lag between the image on the TV and the sound on the TV. This has given me a pretty negative view of Chromecast - basically that it's just good for streaming visual-only things like slideshows etc. Have you found this not to be the case?
I think you're missing the Chromecast button on the YouTube page. You shouldn't have to mirror the tab to fling YouTube to the TV.
Mostly I use it for Netflix, Google Play Movies & TV, and Plex.
Also if you have an Android or iPhone the native application on either device will have the Chromecast icon to fling the video. It's the same icon in Chrome (and maybe other browsers? I'm not sure) to fling from your computer.
Mostly I use it for Netflix, Google Play Movies & TV, and Plex.
Also if you have an Android or iPhone the native application on either device will have the Chromecast icon to fling the video. It's the same icon in Chrome (and maybe other browsers? I'm not sure) to fling from your computer.
Try using the native apps for chromecast for streaming content as opposed to streaming the chrome tab. Youtube has a native chromecast app.
Definitely not. Since Chromecast is sending audio and video over the same connection (HDMI), this is likely a problem with your TV or the like. Do you have a complicated Home Theater setup?
What are the advantages of Chromecast over something like Apple TV?
Much cheaper, doesn't need to plug into wall, more and more open viewing options. Question should probably be reversed (says this Apple fanatic).
I disagree. As someone who owns a Chromecast, I think you're doing a _huge_ disservice to the AppleTV. The Chromecast isn't a standalone device. Period. Full stop. It's basically a mildly improved AirPlay device that still lacks many features (even in the way of AirPlay). Off the top of my head:
1. The streaming isn't system wide. Developers need to incorporate the streaming ability into their apps whereas Apple has it builtin to the device. 2. My parents are unable to understand the concept of "flinging" content; they want it to be a DVR-like device. The AppleTV allows them to rent, purchase, or view previously obtained iTunes content. 3. Music sounds terrible through it. It lacks an optical audio out port so it just uses the TVs speakers which are obviously not great. 4. This is probably a personal issue, but Chrome tab streaming constantly drops out after a short period of time. I've yet to get it working fully. 5. AppleTV can support games being flung to the TV while using the iDevice as a controller. This isn't a selling point, but I'd like my N5 to do the same. 6. My TV (while being a 40" 1080p flat screen) is lacking a USB port so I do have to plug it in. 7. Am I missing where I can stream my Android device's OS on the screen? I know iOS allows you to stream the entire device's OS so you can give presentations and the like.
There are many, many things the Chromecast can't do. It's saving grace is its price point which lessens peoples' expectations but I wouldn't start saying the AppleTV should aspire to be it.
1. The streaming isn't system wide. Developers need to incorporate the streaming ability into their apps whereas Apple has it builtin to the device. 2. My parents are unable to understand the concept of "flinging" content; they want it to be a DVR-like device. The AppleTV allows them to rent, purchase, or view previously obtained iTunes content. 3. Music sounds terrible through it. It lacks an optical audio out port so it just uses the TVs speakers which are obviously not great. 4. This is probably a personal issue, but Chrome tab streaming constantly drops out after a short period of time. I've yet to get it working fully. 5. AppleTV can support games being flung to the TV while using the iDevice as a controller. This isn't a selling point, but I'd like my N5 to do the same. 6. My TV (while being a 40" 1080p flat screen) is lacking a USB port so I do have to plug it in. 7. Am I missing where I can stream my Android device's OS on the screen? I know iOS allows you to stream the entire device's OS so you can give presentations and the like.
There are many, many things the Chromecast can't do. It's saving grace is its price point which lessens peoples' expectations but I wouldn't start saying the AppleTV should aspire to be it.
> The Chromecast isn't a standalone device.
I look at that as a feature. I already have applications I'm comfortable with for browsing and selecting media. I just want a new rectangle to play that media on.
The fact that anyone on my Wifi can access it with their phone, instantly, with nothing to install is a magical experience.
> 3. Music sounds terrible through it. It lacks an optical audio out port so it just uses the TVs speakers which are obviously not great.
HDMI Audio Return addresses that. If your TV and receiver support that (I think most do?), then audio will flow from the Chromecast into your TV and back up the TV's HDMI cable into the receiver.
My Chromecast plays audio through the speakers hooked up to my receiver just fine.
> Am I missing where I can stream my Android device's OS on the screen?
Maybe Chrome for Android supports that? I don't think there's OS level support for Chromecast.
> There are many, many things the Chromecast can't do.
Sure, a boat can't do many of the things an airplane can, and vice versa. They're different devices with very different user experiences.
I look at that as a feature. I already have applications I'm comfortable with for browsing and selecting media. I just want a new rectangle to play that media on.
The fact that anyone on my Wifi can access it with their phone, instantly, with nothing to install is a magical experience.
> 3. Music sounds terrible through it. It lacks an optical audio out port so it just uses the TVs speakers which are obviously not great.
HDMI Audio Return addresses that. If your TV and receiver support that (I think most do?), then audio will flow from the Chromecast into your TV and back up the TV's HDMI cable into the receiver.
My Chromecast plays audio through the speakers hooked up to my receiver just fine.
> Am I missing where I can stream my Android device's OS on the screen?
Maybe Chrome for Android supports that? I don't think there's OS level support for Chromecast.
> There are many, many things the Chromecast can't do.
Sure, a boat can't do many of the things an airplane can, and vice versa. They're different devices with very different user experiences.
> The fact that anyone on my Wifi can access it with their phone, instantly, with nothing to install is a magical experience.
Does ChromeCast not require an app on the device? I thought it wasn't integrated with the OS.
Does ChromeCast not require an app on the device? I thought it wasn't integrated with the OS.
Various apps now include chromecast support, so anyone with the Netflix/YouTube app can stream to your chromecast.
> 3. Music sounds terrible through it. It lacks an optical audio out port so it just uses the TVs speakers which are obviously not great.
I have my TV's optical audio out running to my receiver. That way all my HDMI devices (laptops, Raspberry Pi, Chromecast) are hooked directly to my TV and the audio is automatically sent to my stereo system.
> 4. This is probably a personal issue, but Chrome tab streaming constantly drops out after a short period of time. I've yet to get it working fully
I've never experienced this problem.
For point 6, I prefer to plug in the Chromecast to a real 5V DC power source because the USB port on my TV is only powered when the TV is on, and I like that Chromecast can turn on the TV and switch the input itself.
I have my TV's optical audio out running to my receiver. That way all my HDMI devices (laptops, Raspberry Pi, Chromecast) are hooked directly to my TV and the audio is automatically sent to my stereo system.
> 4. This is probably a personal issue, but Chrome tab streaming constantly drops out after a short period of time. I've yet to get it working fully
I've never experienced this problem.
For point 6, I prefer to plug in the Chromecast to a real 5V DC power source because the USB port on my TV is only powered when the TV is on, and I like that Chromecast can turn on the TV and switch the input itself.
One other point I'd add is that I hate using my phone (or tablet) as a remote for my TV.
I have an Apple TV, and being able to stream content via Air Play for my local TV network, YouTube, and VLC Streamer was nice at first. And then over the months I slowly stopped bothering with my phone and kept grabbing the Apple TV remote.
Interacting with a TV through a phone or tablet interface, no matter how simple, is just not as nice as looking directly at the screen and interacting.
I watch less shows now because of it — because there are more options only available on my phone. I just can't be bothered to use them.
I have an Apple TV, and being able to stream content via Air Play for my local TV network, YouTube, and VLC Streamer was nice at first. And then over the months I slowly stopped bothering with my phone and kept grabbing the Apple TV remote.
Interacting with a TV through a phone or tablet interface, no matter how simple, is just not as nice as looking directly at the screen and interacting.
I watch less shows now because of it — because there are more options only available on my phone. I just can't be bothered to use them.
Well it has different viewing options ("more open" for whatever that's worth). Based on Google's own promotions for Chromecast you gain Google Play and Pandora, and lose iTunes. There's a bunch of other tradeoffs I'm sure (I assume, for example, there's a PBS app for Chromecast just as there is for AppleTV. AppleTV supports Amazon video via AirPlay -- which is good but not great; but Amazon video simply won't play on Chromecast.)
Chromecast is more intelligently architected than AppleTV (you hand off to Chromecast rather than remote-controlling it) but I suspect AppleTV will address this shortly. OTOH AppleTV works with any remote, and you can use any iOS device as a remote, and AirPlay is wonderful.
Chromecast is more intelligently architected than AppleTV (you hand off to Chromecast rather than remote-controlling it) but I suspect AppleTV will address this shortly. OTOH AppleTV works with any remote, and you can use any iOS device as a remote, and AirPlay is wonderful.
It still needs power though so it needs to be plugged into something - whether USB or wall socket. What are the open viewing options? It seems to only provide youtube and google movies in countries that don't have netflix. Does it support streaming a local video from a phone or PC?
HDMI (v1.4) alone is capable of providing power to the Chromecast, pin 18 is specced for +5V/50ma.
Not every TV/monitor supports this since there aren't that many devices out in the field that utilize HDMI power, but if your TV does provide power over the HDMI port then the Chromecast can get everything it needs just from the HDMI port.
Not every TV/monitor supports this since there aren't that many devices out in the field that utilize HDMI power, but if your TV does provide power over the HDMI port then the Chromecast can get everything it needs just from the HDMI port.
Using your Chromecast this way puts you at a disadvantage with many TVs. My TV only provides HDMI power when the input is selected (this may be per the spec) but that eliminates Chromecast's 'switch the input automatically' feature.
Slightly off-topic rant:
In the (European) country that I live in, you can actually buy an Apple TV. Whereas Chromecast simply does not exist.
One can argue all day about how awesome Chromecast is, but if you can't buy it, well, it isn't really competitive. And this has happened with a lot of other Google products which where announced with great fanfare in the past.
Off-topic, I tried to buy a 1-dollar song the other day. This may come as a surprise, but not only Google, but also Amazon were not willing to take my money. Of course iTunes happily accommodated me, as it has always been doing for many years.
In the (European) country that I live in, you can actually buy an Apple TV. Whereas Chromecast simply does not exist.
One can argue all day about how awesome Chromecast is, but if you can't buy it, well, it isn't really competitive. And this has happened with a lot of other Google products which where announced with great fanfare in the past.
Off-topic, I tried to buy a 1-dollar song the other day. This may come as a surprise, but not only Google, but also Amazon were not willing to take my money. Of course iTunes happily accommodated me, as it has always been doing for many years.
Two things. Price, and no lock-in to Apple's ecosystem.
Aren't you instead locked into Google's ecosystem?
To some extent. Google has to whitelist the apps that use the API. Right now that means you have access to Google's media offerings (including Youtube and G+) of course, but also Netflix and Hulu. Not Amazon yet or (obviously) iTunes.
It will play your local music content, but only recently whitelisted a few apps capable of playing your own video files (even then the codecs and containers supported by Chromecast are a short list, so be prepared to do a bunch of transcoding).
It's not open for sure. But it's not bad either; at $35 I'm willing to forgive the lack of hackability (I have a linux box on the same TV for that, this thing is just a convenience).
And the UI is basically perfect: pull the phone out of your pocket, play the video using exactly the same apps you're used to, and just click the chromecast button to send it to the TV. No more hunting for remotes; on my TV it will even turn it on and switch to the right input source automatically.
It will play your local music content, but only recently whitelisted a few apps capable of playing your own video files (even then the codecs and containers supported by Chromecast are a short list, so be prepared to do a bunch of transcoding).
It's not open for sure. But it's not bad either; at $35 I'm willing to forgive the lack of hackability (I have a linux box on the same TV for that, this thing is just a convenience).
And the UI is basically perfect: pull the phone out of your pocket, play the video using exactly the same apps you're used to, and just click the chromecast button to send it to the TV. No more hunting for remotes; on my TV it will even turn it on and switch to the right input source automatically.
No, first party service support is better of course, but there are quite a few third party services that are cast-friendly.
Yes and you basically get the same content on Apple TV (Youtube, Hulu, Netflix...)
At this point, mainly cost and size (just plug it into the back of the tv and it is out of the way). Potentially, apps, but that is a sore point at the moment, as there are not many to speak of.
It's cheap. I bought one for my bedroom tv which I only use when falling asleep. I already have a Roku for the living room. Until the SDK comes out their features cannot be compared.
I wrote up the differences on my blog a a while ago http://riobard.com/2013/08/23/chromecast-vs-apple-tv/
I responded above, sorry :)
What was their primary reason for getting one?
In mine and my wife's parents cases, Netflix. They didn't even know such a service existed before though, or they might've had a different solution in place already.
My sisters, Netflix and for my younger sister mainly YouTube and Google Music (which she rarely used before she got the Chromecast, as she has an iPhone and the app just came out for iOS).
My sisters, Netflix and for my younger sister mainly YouTube and Google Music (which she rarely used before she got the Chromecast, as she has an iPhone and the app just came out for iOS).
Agreed. We think this approach is brilliant and suggests Google sees the TV as merely another screen. Chromecast combines the web dev model with the processing power of PCs (and mobile devices), making it a more flexible and powerful way to reshape the TV as another computing endpoint. Most importantly, Google innovation no longer is constrained by TV manufacturers and their divergent interests. Here's a Google game console: screen (TV) + processing (PC) + controllers (mobile device).
Instead, by the Summer of 2016, the majority of living rooms will be using Chromecast or something similar running Android. Android will acquire a monopoly share in smart TV, exactly like it did in smart phones and tablets. In fact, the game is already over, the competition just doesn't realize it yet.
If they intend that, it is foolish. When you use a computer, you sit close to it to read. When you use a tablet, you sit close to it.
When you use a TV, it is far away. Yet TV manufacturers seem to think that you want to read on it. It is far away. Seems daft to me.
perhaps, and Google still won't make a dime on it. incredible really.
>Android will acquire a monopoly share in smart TV, exactly like it did in smart phones and tablets.
what.
what.
> And Google TV. Let's not forget that huge failure.
Not to mention http://en.wikipedia.org/wiki/Nexus_Q
Not to mention http://en.wikipedia.org/wiki/Nexus_Q
Considering they never actually exchanged money a single Q (the people who pre-ordered them wound up getting them free, as did I/O 2012 attendees), it doesn't seem to be so much of a failure as it was just market research on how to do it the next time.
Notwithstanding the built-in amp, the Chromecast is a pretty narrow superset of the Q at least in terms of features.
Notwithstanding the built-in amp, the Chromecast is a pretty narrow superset of the Q at least in terms of features.
Considering they never actually exchanged money a single Q
Experiments don't always pan out and they avoided the PR hit of releasing a turd. If the Nexus Q was more than couch-cushion money I'd be surprised.
I dunno, the Q was pretty brilliant as a piece of performance art.
I actually, non-ironically like having a Nexus Q, if only as a conversation piece. The thing looks really cool.
It makes me wonder how this will affect Google management's willingness to make additional attempts in hardware. For example, will they still push Google Glass? As you suggest, Google TV? Further out, they seem to be pursuing things like autonomous vehicles -- perhaps this could motivate them to limit their ambitions to the software/AI aspects of it.
Google just bought Nest.
Smart TVs aren't a failure yet - I hope Google keeps their plans going. It'll be pretty much like Microsoft's Xbox...
I got confused by you mixing smart TV with Xbox.
I still think Smart TV concept and architecture is pretty failed from the market. From SetTopBox to Apple TV to Google TV, whenever I saw there is a box attached to the TV which can receive the TV program from the internet, it looks so weird to me. Maybe that's why it's not popular.
Eventually we need to get the TV be real smart and be controlled by the PC instead of smart phone which requires the Android to be embedded into the TV box in order to render the graphics.
I still think Smart TV concept and architecture is pretty failed from the market. From SetTopBox to Apple TV to Google TV, whenever I saw there is a box attached to the TV which can receive the TV program from the internet, it looks so weird to me. Maybe that's why it's not popular.
Eventually we need to get the TV be real smart and be controlled by the PC instead of smart phone which requires the Android to be embedded into the TV box in order to render the graphics.
I meant it as a comparison to how the Xbox was a failure for a pretty long time until it took off.
TVs with the ability to show a calendar, play Angry Birds and browse Youtube make sense to me, it seems like a natural progression of the good old set top box. If these new TVs run Google's OS, the company will win sooner or later...
TVs with the ability to show a calendar, play Angry Birds and browse Youtube make sense to me, it seems like a natural progression of the good old set top box. If these new TVs run Google's OS, the company will win sooner or later...
I got your point now. So set top box, internet TV died. Now it's the time for smart TV which is controlled by the smart phone. I'm pretty tired about smart phone, too.
If TV is controlled by PC, I can play internet game on it and watch movies with high quality, like in home theater without the high cost.
If TV is controlled by PC, I can play internet game on it and watch movies with high quality, like in home theater without the high cost.
> "By the summer of 2012, the majority of the televisions you see in stores will have Google TV embedded in it."
Still could happen. (checks calendar...) Nevermind, then.
Still could happen. (checks calendar...) Nevermind, then.
> Now, if it is true that the patents are part of the deal (the article states they are)
It says "certain patents", which would suggest a minor amount.
It says "certain patents", which would suggest a minor amount.
WRT the patents, it depends on the details of the sale, and how/why Google valued them. Speculation was that one reason Google bought Motorola was to keep someone else from getting the patents and being able to use the patents against Google. If that was responsible for a large portion of the valuation, that might still be retained in a sale to Lenovo, depending on how precisely the sale is structured. It's fairly common in patent sales to include terms protecting the seller, so Lenovo would likely not be able to turn around and sue Google with the just-purchased patents. If so, Google would still retain the portion of the patents' value relating to them not being in the hands of someone who can sue Google using them.
From Google's official announcement[1], undersigned by Larry Page:
"Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem. "
[1] http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...
"Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem. "
[1] http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...
Most of the patents have been pretty worthless so far. They are mostly standards essential patents that need to be licensed on FRAND terms and in the last 3 years they've had zero enforceable injunctions in their favor.
Relevant: https://twitter.com/reckless/status/428653694998298624
Relevant: https://twitter.com/reckless/status/428653694998298624
We don't know what patents google is retaining, so it's unclear whether they're FRAND or truly valuable.
Also, I've followed Nilay's post on several of these patent issues; he's either wrong or he sensationalizes to fit his narrative. I don't think he's very credible, even with a J.D.
Also, I've followed Nilay's post on several of these patent issues; he's either wrong or he sensationalizes to fit his narrative. I don't think he's very credible, even with a J.D.
We know the quality of the patents from what they've attempted to assert in courts in jurisdictions all over the world. They've not been successful anywhere.
Unless you want to make the leap that they've been holding back all their valuable IP from their patent assertions for some unknown reason, I think it's a pretty safe conclusion.
Unless you want to make the leap that they've been holding back all their valuable IP from their patent assertions for some unknown reason, I think it's a pretty safe conclusion.
The extremely limited patent actions were pre-Google, and were largely contrived as negotiating tools. Trying to draw anything from that is foolhardy.
Why wouldn't they have used their strongest applicable patents? They may have more similar ones and maybe one or two will hold up but do you really think if they had some powerful non-FRAND ones they wouldn't have used them on Apple or Mircrosoft by now?
We didn't use nukes in Vietnam. The value of the Motorola's patents may be in keeping Apple and Microsoft from using their strongest patents.
I don't understand what the point of that would be. Patents only have a limited life and the stronger stronger and broader they are the more they strengthen you negotiating position. Of course there is uncertainty so you don't going in which will survive sufficiently but you don't deliberately pick anything but the best.
I just don't see the scenario were you can't do a licensing deal with your opponent but you agree to use you second rank patents in the lawsuit.
I just don't see the scenario were you can't do a licensing deal with your opponent but you agree to use you second rank patents in the lawsuit.
> Most of the patents have been pretty worthless so far. They are mostly standards essential patents that need to be licensed on FRAND terms
Standards-essential patents that have to be licensed on FRAND terms are "worthless" only in the sense that an ongoing income stream is worthless.
Standards-essential patents that have to be licensed on FRAND terms are "worthless" only in the sense that an ongoing income stream is worthless.
The income stream is tiny or nonexistent. Microsoft recently challenged Moto's demands and ended up paying a royalty for every XBox. The royalty is so small that Google will end up having lost money on the litigation. And reasonable reading of the patents involved show that the royalty was grossly inflated. One of the patents was literally a patent on a number.
The purpose of patents in the smartphone wars is to force your competitors to deliver second rate phones or collect billions in damages. That's what Microsoft and Apple are doing to Android manufacturers. If Google can't retaliate, the patents are worthless in this context.
FRAND patents will never block Microsoft and Apple from using common, obvious functionality on their phones. Therefore they're worthless.
Microsoft have ignored standards and instead patented obvious necessary functionality and user interface elements and mathematical operations. Since prior art and obviousness are a dead letter at the Patent Office and the courts, these are the patents that are useful and valuable.
Essential technology patents based on research and development are worthless. Bounce-to-refresh, search boxes that actually search, long filenames, and other trivial or long known elements that can be forced past exhausted patent examiners are worth everything.
The purpose of patents in the smartphone wars is to force your competitors to deliver second rate phones or collect billions in damages. That's what Microsoft and Apple are doing to Android manufacturers. If Google can't retaliate, the patents are worthless in this context.
FRAND patents will never block Microsoft and Apple from using common, obvious functionality on their phones. Therefore they're worthless.
Microsoft have ignored standards and instead patented obvious necessary functionality and user interface elements and mathematical operations. Since prior art and obviousness are a dead letter at the Patent Office and the courts, these are the patents that are useful and valuable.
Essential technology patents based on research and development are worthless. Bounce-to-refresh, search boxes that actually search, long filenames, and other trivial or long known elements that can be forced past exhausted patent examiners are worth everything.
I'd say you hit the nail right on the head, but I find myself imagining this statement more like a compressed air nail gun shooting the nail so far into the wood that it splits; resulting in the entire house falling down.
I'd be shocked if Google doesn't get full access to use all the patents covered in the deal( assuming the reports are right and the patents are going to Lenovo), but even with that in mind a big part of the value of holding lots of patents in some technology area is (unfortunately) that you can use them as a nuclear option against someone who is suing you for some other patent to allow for MAD-style defense. IANAL but I'm not sure how they could structure a deal that gives away the patents but keeps that defensive option available.
[deleted]
Wasn't there some story about how Motorola represented billions of dollars tax savings from deferred tax credits? Is it potentially possible to sell the rest of the business while keeping those?
I would wager that it means a ton of these patents arent useful anymore.. the stuff coming out of google X will pretty much make these old patents kinda uselesss.
Even the very nature of the cell phone is rapidly changing and Google Glass is a useless halfstep with contacts coming right around the corner which will be the real hardware killer.
Even the very nature of the cell phone is rapidly changing and Google Glass is a useless halfstep with contacts coming right around the corner which will be the real hardware killer.
...a lot of Motorola's patents are related to underlying voice and networking technologies. Unless Google X is proposing to come out with a replacement for GSM (...and it's not) that stuff isn't changing.
GSM is over by 2017/2018 for carriers stateside. Where will the patents for these topologies and compression schemes be then? That is proverbially around the corner corporately.
I think your estimates are a bit optimistic - that aside - the GSM RAN will be going away, not the GSM core - that lives on for UMTS and LTE.
>Google shredded 85% of the $13bn paid for Motorola
http://www.engadget.com/2013/04/17/arris-closes-deal-to-buy-...
To be fair they got $2.2bn of it back by selling off Motorola's cable STB and modem business.
http://www.engadget.com/2013/04/17/arris-closes-deal-to-buy-...
To be fair they got $2.2bn of it back by selling off Motorola's cable STB and modem business.
I believe Motorola also had $3B in cash when acquired.
Yeah, I'm not sure how straightforward it all was, but according to this article:
> At $12.5B, Motorola is Google’s largest acquisition to date. Google paid $40 / share in cash, but received ~$11 / share in cash and $8 / share in deferred tax assets. Thus the value ascribed to operations + patents was about $21 / share, or $6.3B, reflecting a multiple of ~0.5x sales and 12x EBITDA. Now adjusting this further for the $2.35B total consideration Google is expected to receive for the Motorola Home business, we get a purchase price of just under $4B for Motorola's handset business and patent portfolio (17K patents and 7.5K patent applications).
http://www.zdnet.com/googles-motorola-purchase-was-it-worth-...
So it seems like it would end up being $1 billion for a bunch of patents. The whole process has been rather weird, in the end.
> At $12.5B, Motorola is Google’s largest acquisition to date. Google paid $40 / share in cash, but received ~$11 / share in cash and $8 / share in deferred tax assets. Thus the value ascribed to operations + patents was about $21 / share, or $6.3B, reflecting a multiple of ~0.5x sales and 12x EBITDA. Now adjusting this further for the $2.35B total consideration Google is expected to receive for the Motorola Home business, we get a purchase price of just under $4B for Motorola's handset business and patent portfolio (17K patents and 7.5K patent applications).
http://www.zdnet.com/googles-motorola-purchase-was-it-worth-...
So it seems like it would end up being $1 billion for a bunch of patents. The whole process has been rather weird, in the end.
They have also eaten large Motorola losses for quite a few quarters now. So it's not just the purchase price that is on the cost side.
"That means that in less than two years, Google shredded 85% of the $13bn paid for Motorola"
http://www.forbes.com/sites/timworstall/2012/12/22/did-motor...
If this story is true, Google keeps accrued losses (you can't sell losses with a division). Add cash on hand, the sales of the STB business, and it's pretty far from $13 billion. By some accounting Google would still come out ahead.
But I have trouble believing this story. Given recent initiatives at Motorola, the light seemed to be appearing at the end of the tunnel.
As one aside, Lenova purportedly wanted to bid on Blackberry, but was blocked by the Canadian government for national security reasons.
http://www.forbes.com/sites/timworstall/2012/12/22/did-motor...
If this story is true, Google keeps accrued losses (you can't sell losses with a division). Add cash on hand, the sales of the STB business, and it's pretty far from $13 billion. By some accounting Google would still come out ahead.
But I have trouble believing this story. Given recent initiatives at Motorola, the light seemed to be appearing at the end of the tunnel.
As one aside, Lenova purportedly wanted to bid on Blackberry, but was blocked by the Canadian government for national security reasons.
[deleted]
This graph[1] tells some of the story, but the bigger story was they failed to capitalize on the patents, and even got fined by a jury for trying to abuse FRAND patents on WiFi and H.264.
http://static1.businessinsider.com/image/52605103ecad0479335...
http://m.computerworld.com/s/article/9242129/Microsoft_wins_...
Edit: The timing is very interesting too. Google reports its quarterly earnings tomorrow, and was known to have spent about $500M on advertizing the Moto X which hasn't been selling well and which must have dragged Google's earnings down. Releasing this news now will help calm investors tomorrow. Also, can't imagine that Lenovo will continue subsidizing the Moto X/Moto G, so I expect prices to go up once the acquisition completes.
http://static1.businessinsider.com/image/52605103ecad0479335...
http://m.computerworld.com/s/article/9242129/Microsoft_wins_...
Edit: The timing is very interesting too. Google reports its quarterly earnings tomorrow, and was known to have spent about $500M on advertizing the Moto X which hasn't been selling well and which must have dragged Google's earnings down. Releasing this news now will help calm investors tomorrow. Also, can't imagine that Lenovo will continue subsidizing the Moto X/Moto G, so I expect prices to go up once the acquisition completes.
Increasing the price of a phone that "hasn't been selling well"? Doesn't seem like a good tactic to me (if they currently sell them at a loss, it would be an improvement, but it would be more cutting your losses than being a success)
Luckily, by the time the acquisition completes, those phones will be obsoleted by newer models ('completes' will take months, if not years)
Luckily, by the time the acquisition completes, those phones will be obsoleted by newer models ('completes' will take months, if not years)
[deleted]
A lot depends on the remaining 7,000 patents.
It looks like Google used the Motorola patents to get Samsung to tone down its Android skinning: http://recode.net/2014/01/29/after-google-pressure-samsung-w...
If this keeps Android from being forked by Samsung, I'd say it's not such a big loss.
If this keeps Android from being forked by Samsung, I'd say it's not such a big loss.
Perhaps you can look at it from a different angle: Samsung made it very clear that they would continue to fork Android, unless Google stopped making smartphones and dropped Motorola.
In a way Samsung has much more leverage over Android than Google.
Google should be picking another OEM (Lenovo?) and doing everything it can to push its sales, to create competition for Samsung. The whole point of Android was that by making the OS free software, it would neuter the OEMs, not give them the power to fork the OS.
I agree. Think reason Rubin left Android team in Google was because google realized samsung had too much control and google wasn't happy with Rubin too much...
It is confirmed: http://investor.google.com/releases/2014/0129.html
Google may not be able to keep all the tax losses. It was originally reported that google would save $700M a year through 2019.* I'm not sure that they those losses are severable from the rest of the company.
* E.g. http://www.reuters.com/article/2011/08/31/us-motorolamobilit...
* E.g. http://www.reuters.com/article/2011/08/31/us-motorolamobilit...
There are two types of tax losses. There are those related to previous losses that Google captured on acquisition. The $700MM a year estimate relates to the anticipated future losses of Motorola. While Google is losing that benefit, it is by definition less than the amount lost! So it's not actually a benefit.
Seems surprising that they have to sell the whole Motorola division for less than they bought this little company Nest for.
> Seems surprising that they have to sell the whole Motorola division for less than they bought this little company Nest for.
At the time of the Motorola acquisition, it was widely portrayed that they were buying the patent portfolio and that the rest of Motorola was largely dead weight that came along with the patent portfolio. Since they are keeping the patents (but giving Lenovo a license to them), it doesn't seem like that bad of a deal.
At the time of the Motorola acquisition, it was widely portrayed that they were buying the patent portfolio and that the rest of Motorola was largely dead weight that came along with the patent portfolio. Since they are keeping the patents (but giving Lenovo a license to them), it doesn't seem like that bad of a deal.
Nest is worth every penny.
As for why Google specifically acquired them? Possibly because a general partner at KPCB (Nest's biggest investor and one of Google's early investors) also holds a seat on Google's board. Nest was one of Google Ventures largest investments and Google Ventures holds a seat on Nest's board. There's nothing like having the seller also be the one involved in the buying decision.
Nest makes great products and has an awesome team. I think they're worth more than what Google paid.
As for why Google specifically acquired them? Possibly because a general partner at KPCB (Nest's biggest investor and one of Google's early investors) also holds a seat on Google's board. Nest was one of Google Ventures largest investments and Google Ventures holds a seat on Nest's board. There's nothing like having the seller also be the one involved in the buying decision.
Nest makes great products and has an awesome team. I think they're worth more than what Google paid.
Lenovo is getting 2,000 patents, not 10,000.
http://investor.google.com/releases/2014/0129.html
http://investor.google.com/releases/2014/0129.html
> Now, if it is true that the patents are part of the deal (the article states they are)
The patents aren't being sold as part of the deal -- it's officially announced, and Google keeps the patents (or, at least, "the vast majority of" them) but Lenovo gets a license to them. [1]
[1] http://motorola-blog.blogspot.com/2014/01/motorola-to-join-l...: "Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio."
The patents aren't being sold as part of the deal -- it's officially announced, and Google keeps the patents (or, at least, "the vast majority of" them) but Lenovo gets a license to them. [1]
[1] http://motorola-blog.blogspot.com/2014/01/motorola-to-join-l...: "Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio."
It says in paragraph 3: "Under this deal the search giant will keep the majority of Motorola's mobile patents, considered its prize assets."
This is the silliest HN thread I have ever seen. All the time it was considered proof that Google is evil that they compete with other makers of Android handsets. People who like Google said from the beginning that Google was forced to buy Google because of the patent wars getting out of hand. Now that claim has been validated.
I am really, really surprised by this HN thread. I've been on HN for 6 years and have never seen anything like it.
This is the silliest HN thread I have ever seen. All the time it was considered proof that Google is evil that they compete with other makers of Android handsets. People who like Google said from the beginning that Google was forced to buy Google because of the patent wars getting out of hand. Now that claim has been validated.
I am really, really surprised by this HN thread. I've been on HN for 6 years and have never seen anything like it.
Even if Google had to give Motorola away, the deal was good for them. The acquisition spurred a huge quality jump in the Android ecosystem and today Android outsells iOS by a 5-1 margin.
I'm not sure if someone has said this but I think it was stupid for Google to get into the smartphone hardware business because it put them in direct competition with their partners. I bet you that all over the world management at HTC, LG, Samsung, Sony, Huawei, you name it, will be breathing a collective sigh of relief.
>That means that in less than two years, Google shredded 85% of the $13bn paid for Motorola.
You did not even make it down to the third paragraph of the article?
Under this deal the search giant will keep the majority of Motorola's mobile patents, considered its prize assets.
SMH
You did not even make it down to the third paragraph of the article?
Under this deal the search giant will keep the majority of Motorola's mobile patents, considered its prize assets.
SMH
Your condescension is unwarranted. This originally pointed to an earlier Reuters article on the deal prior to the later story. The later story contains information from the official Google statement.
Prior to the official company statement, sources stated that up to 10,000 patents were being transferred to Lenovo in the deal, which is the majority of the 17,000 believed to be owned by Motorola Mobility. My comment you responded to reflects what was known at the time prior to official announcement of the deal.
I understand it's often easiest to assume that those around you are stupid, especially on the Internet, but I would respectfully request that you at least consider alternatives to what may appear to you as stupidity, and temper your comments to reflect that possibility.
Prior to the official company statement, sources stated that up to 10,000 patents were being transferred to Lenovo in the deal, which is the majority of the 17,000 believed to be owned by Motorola Mobility. My comment you responded to reflects what was known at the time prior to official announcement of the deal.
I understand it's often easiest to assume that those around you are stupid, especially on the Internet, but I would respectfully request that you at least consider alternatives to what may appear to you as stupidity, and temper your comments to reflect that possibility.
Very odd news. Was looking forward to seeing what Google could do with their weight thrown behind hardware.
And they're off to a good start with the Moto X and Moto G. I don't really understand why they'd want to sell Motorola now.
Because they aren't actually off to a good start.
Sale for the MotoX at least have been... unimpressive.
You don't achieve impressive sales numbers for a smartphone in one generation, because of the enormous importance of brand recognition. Samsung makes subpar handsets at best, but achieve enormous sales because of their brand recognition. That took them several generations to build up. It wasn't until the S3 that people really started to recognize Samsung phones as a distinct entity.
Google should've given Motorola at least 2 or 3 more years before calling it quits, if they really wanted to gain a foothold in the hardware market.
Google should've given Motorola at least 2 or 3 more years before calling it quits, if they really wanted to gain a foothold in the hardware market.
Yea--the only reason I even know about Moto X is because I
was looking for a cheap data plan, and stumbled upon the phone at rebublic wireless. My point is I agree--it takes time.
True. Feels like the 80s with the Japanese all over again, and American companies giving up and selling out before they've even gone a single round.
I'm curious as to what exactly Lenovo is getting out of the deal. I hear good things about the new Motorola phones, but is the midlevel handset business really that attractive a one? I doubt HTC or Sony are feeling particularly good about their exposure to it.
The same thing Lenovo got from buying IBM's PC and now server businesses. Instant inroads into a foreign market. I mean, Lenovo went from a brand no one had ever heard of to the worlds largest PC maker in a decade or so. They're pretty awesome at squeezing money out of low margin businesses and creating some pretty high quality products (their own branded smartphones are pretty awesome looking, wish they sold in Canada).
They might look awesome in the pictures. I was testing their handsets while visiting Thailand and the only good thing about them was that they were cheap. The builds were pretty bulky and the OS felt quite slow when comparing to the Nexus 5 right next to them. Of course you paid 3000-6000 THB from then when Nexus was 16900 THB...
I am guessing market share for mobiles in the US is their first target. It would certainly give them an enormous kick start into the market. It looks like a similar strategy when bought the laptop business from IBM.
[deleted]
Google looks a lot smarter to me now. They paid way too much for Motorola Mobility just to get the patents. Maybe they were forced to buy a bunch of stuff they didn't want? It makes sense to recoup as much of the money as they can by selling off what they didn't even want.
Slightly disappointed this is happening, Google having its own place to start really getting invested in consumer hardware seemed like a good thing (getting "pure" experiences without having to pay top dollar). I got the Moto G and it's probably one of the better value propositions out there.
I wonder how things will go with Lenovo in charge.
I wonder how things will go with Lenovo in charge.
Wow, that seems... sudden. If the Motorola Mobility purchase was meant to be strategic (and surely a purchase that big was), how could they have possibly had time to implement that strategy and truly gauge its effectiveness?
I'd say this announcement, if true, is downright shocking. Not saying it's wrong, mind you, just that it's very, very surprising. At least from the Google perspective.
Now, Lenovo, OTOH, this seems to fit the "PC Plus" view very well. If this is true, it could be a huge win for Lenovo.
I'd say this announcement, if true, is downright shocking. Not saying it's wrong, mind you, just that it's very, very surprising. At least from the Google perspective.
Now, Lenovo, OTOH, this seems to fit the "PC Plus" view very well. If this is true, it could be a huge win for Lenovo.
we are forgetting something here at least the TC post did
Moto still has Fed/Military contracts as this is why foreign buyers were nto considered the first time around.
This might not go through to completion
Moto still has Fed/Military contracts as this is why foreign buyers were nto considered the first time around.
This might not go through to completion
This is Motorola Mobility though, which only includes the cell phone business and was spun off from Motorola (not called Motorola Solutions) and later sold to Google.
I wonder if Samsung was aware of this? Were Motorola patents part of the cross-licensing?
I wonder if it's true that G did buy it in somewhat of a panic due to what was happening with patents at the time, as some have speculated. I dunno how something as protracted as an acquisition can happen as a result of panicking, though.
I suspect the patents were proving to be of less value than Google thought. Combine that with Samsung and other big players investigating other OS's for fear of Google pulling a Microsoft with the Surface. Any way I slice it though, it still sounds like a 10+ billion dollar mistake.
I wonder if I should be in a hurry to buy a Moto G now as a test device and secondary phone? I'm not sure how good Lenovo's cell phones are.
One big experiment by Google to cheaply increase worldwide mobile connectivity and subsequent ad dollars.
So much spin I get dizzy just reading this sentence.
I'm not a huge fan of Android, but I had hoped that Google would use Motorola to take a holistic approach to security similar to what Apple can do. This would have been a serious pain for both the NSA and the PLA, but instead they are selling the whole business to the PLA.
Makes me wonder how this affects their recent patent pact with Samsung -- now that they have Samsung as a form of support, they no longer need Motorola Mobility?
Perhaps a patent pact with Motorola Mobility would've been better than buying them outright?
Perhaps a patent pact with Motorola Mobility would've been better than buying them outright?
Google is a mess. Seriously. What happened? It's like there's been a void in their executive leadership in the last couple years.
One co-founder is busy with moonshots and the other with getting Google+ integrated everywhere he can. I say this only slightly in jest. Google's two co-founders are focussing on something most people hate and things that have a small chance of paying off many many years from now.
>and the other with getting Google+ integrated everywhere he can
And what's more important - everywhere he cannot
And what's more important - everywhere he cannot
That is still too much for Motorola handset division. Google must estatic at he chance to recoup that much from one of the worst deals they've ever done.
I wonder if this has anything to do with Apple's focus on the Chinese market. Google could effectively hand off a tightly wound partnership to an established Chinese company in Lenovo that can then leverage Android more effectively in a head to head battle with Apple.
In the interim, Google keeps its hands clean and doesn't enter into the discussions that plague any sort of success in the Chinese marketplace.
In the interim, Google keeps its hands clean and doesn't enter into the discussions that plague any sort of success in the Chinese marketplace.
Apple will never compete for serious market share in China no matter what happens. They'll be lucky to hold onto 5% to 7% of that market. The domestics will dominate, due to nationalism, price, and those companies better understanding what Chinese consumers want. There's a reason Android already has 80% (and climbing, as iOS loses market share) of China.
There are plenty of strong android competitors in the chinese market. Google's Hugo Barra headed to Xiaomi just last year.
Good point. The Chinese market is all about political approval and you're expected to bend over backwards for them. But then again... Google has pretty much burned that bridge pulling out of China.
Doubtful Lenovo would keep Google Apps, Search, Gmail etc on their Chinese-market Android phones.
I am sure I am part of the minority on HN involved in the enterprise market, but I am intrigued by what Lenovo's plans might be for Motorola. With their already established relationships and customer base, Lenovo should have a much easier time selling their hardware than Google did. At the very least, this move might be the final death knell for Blackberry.
I have a related suspicion ... that Google made the deal in part because they believe Lenovo will run Motorola well, with goals compatible to Google and Android.
I don't think Google was ever into Motorola to make it pay. They were there for strategy, and Lenovo can do that too.
(Don't forget that Lenovo just bought IBM's x86 server business, and so is "going big.")
Update, sorry for the bad link http://www.pcworld.com/article/2090680/lenovo-agrees-to-buy-...
I don't think Google was ever into Motorola to make it pay. They were there for strategy, and Lenovo can do that too.
(Don't forget that Lenovo just bought IBM's x86 server business, and so is "going big.")
Update, sorry for the bad link http://www.pcworld.com/article/2090680/lenovo-agrees-to-buy-...
There are a lot of Chicago real-estate agents that won't sleep well tonight.
The Mobility move to downtown was supposed to happen in a few months. Google signed a 15-year deal on 750,000 square feet (17+ acres) of office space at the Merchandise Mart. Will Leonovo assume that lease?
The Mobility move to downtown was supposed to happen in a few months. Google signed a 15-year deal on 750,000 square feet (17+ acres) of office space at the Merchandise Mart. Will Leonovo assume that lease?
3Billion dollars? Wasn't Lenovo going to pay close to 4.5 Billion for RIM in october? Either RIM was overvalued or this is a steal
This makes this tweet[1] from Chris Dixon hilarious:
"Which strategy wins the future: stock buybacks or investing in AI + robots + smart devices?"
I mean it really shouldn't surprise anyone that a VC would be cheerleading expensive acquisitions with no regard for shareholder value or whether it has any hope of making a significant return.
But the real answer to his question is: organic growth. And if you are confident in your ability to create organic growth, then the best way to use large amounts of cash to create shareholder value over the long-term is stock buybacks (assuming you have the cash to fund that organic growth and your shares are undervalued, which in Apple's case, both are true).
[1]https://twitter.com/cdixon/status/427602474086584320
"Which strategy wins the future: stock buybacks or investing in AI + robots + smart devices?"
I mean it really shouldn't surprise anyone that a VC would be cheerleading expensive acquisitions with no regard for shareholder value or whether it has any hope of making a significant return.
But the real answer to his question is: organic growth. And if you are confident in your ability to create organic growth, then the best way to use large amounts of cash to create shareholder value over the long-term is stock buybacks (assuming you have the cash to fund that organic growth and your shares are undervalued, which in Apple's case, both are true).
[1]https://twitter.com/cdixon/status/427602474086584320
I know Google is trying to break out of their traditional business, but it seems like they've been trying to do that for years and nearly all their revenue is still ads.
Just because very smart entrepreneurs are able to capitalize on an opportunity (search) and turn it into one of the world's largest companies, doesn't mean they can arbitrarily do it again.
Just because very smart entrepreneurs are able to capitalize on an opportunity (search) and turn it into one of the world's largest companies, doesn't mean they can arbitrarily do it again.
To my eyes, Google has been looking for the "Next Google" since at least 2004 or so.
Has any company the size of Google ever successfully pulled of this sort of diversification? (Honest question, there may well be answers I'm not thinking of. But I do mean very large companies, I know smaller ones diversify all the time successfully (and unsuccessfully).)
For context, you think about a company like Microsoft or Google "diversifying", and, you know, for them it's not enough to "merely" build a $250 million/year business for it to be considered a leg of the metaphorical company stool, instead of just a "hobby". How can you hope to scale up a new core competency to the requisite levels? (It seems "merely" having vast resources is no guarantee of success.)
For context, you think about a company like Microsoft or Google "diversifying", and, you know, for them it's not enough to "merely" build a $250 million/year business for it to be considered a leg of the metaphorical company stool, instead of just a "hobby". How can you hope to scale up a new core competency to the requisite levels? (It seems "merely" having vast resources is no guarantee of success.)
> Has any company the size of Google ever successfully pulled of this sort of diversification?
How many companies the size of Google are NOT heavily diversified? Think GE, 3M, etc.
How many companies the size of Google are NOT heavily diversified? Think GE, 3M, etc.
Is Wal-Mart diversified? Is Exxon Mobil? Bank of America?
> Is Wal-Mart diversified?
I know that you thought you were providing a counterexample (which is odd, since I wasn't making some kind of universal claim) but yeah, they are. Branching into groceries represented a pretty bold diversification. I'm pretty sure they've talked about even providing banking services. They're about as diversified as a dedicated brick and mortar retailer can possibly be, and it's not hard to see why: they control their existing niches and they want to continue growing.
I know that you thought you were providing a counterexample (which is odd, since I wasn't making some kind of universal claim) but yeah, they are. Branching into groceries represented a pretty bold diversification. I'm pretty sure they've talked about even providing banking services. They're about as diversified as a dedicated brick and mortar retailer can possibly be, and it's not hard to see why: they control their existing niches and they want to continue growing.
I wasn't aiming for a counterexample so much as an illustration of the fact that whether a company is diversified or not is a matter of definition.
Is a company diversified if it operates in related markets in the same sector, like a bank that does retail and business banking? Is a company diversified if operations outside their core business are only a small fraction of their turnover, like an oil company that has a small renewables operation?
If the purpose of diversification is to keep the company afloat if there's a downturn in one market, these properties are important. Being in retail and business banking won't help if the entire banking sector has problems, and 1% of your business won't keep you afloat if the other 99% of your business is sinking.
Is a company diversified if it operates in related markets in the same sector, like a bank that does retail and business banking? Is a company diversified if operations outside their core business are only a small fraction of their turnover, like an oil company that has a small renewables operation?
If the purpose of diversification is to keep the company afloat if there's a downturn in one market, these properties are important. Being in retail and business banking won't help if the entire banking sector has problems, and 1% of your business won't keep you afloat if the other 99% of your business is sinking.
Intel did something even more drastic: they shuttered the division that was making 90% of the companies revenues (memory chips) and completely pivoted to a new business (microprocessors).
IBM has had a pretty significant pivot - they've now sold off both their desktop computing division and their server division to lenovo.
IBM is a great example of reverse diversification. At one time, it looked like taking over the world (buying Rolm etc), but after the crash it has been selling off divisions on a regular basis: PCs, printers, drives etc. These were once considered core businesses.
Amazon has done it a couple of times (Kindle, AWS).
Those two things are still a tiny fraction of revenue from the main retail store.
[deleted]
I'm no expert, but Samsung may be one of the successfully diversified companies.
Just look at their "Products" and "Services" tab on the Wikipedia page: https://en.wikipedia.org/wiki/Samsung
Obviously they're around since 1930s so they definitely had more time and opportunities to do so :)
Just look at their "Products" and "Services" tab on the Wikipedia page: https://en.wikipedia.org/wiki/Samsung
Obviously they're around since 1930s so they definitely had more time and opportunities to do so :)
Um, Apple? Microsoft gets a lot of flack but frankly it has done pretty well. It makes a lot of money in several different divisions outside of windows and office.
Apple has always been a consumer electronics company...they may have a diverse set of consumer electronics, but they aren't truly diveresified. I think a truly diversified company is more like GE, 3M, Samsung, Honda, etc.
I don't think you have to be a conglomerate to have diversified product lines. They were just a PC company for 20 years. Then they added iPod, then iPhone, then iPad. On top of that they have itunes and apps which are by themselves a large growing business. 5 different billion dollar businesses is pretty good.
Google on the other hand has ads. If you want to be generous you can break it out to search and YouTube. Android is obviously huge, but they don't really make money on it. The interesting thing IMO is that they likely would be making more money if they just stayed friendly with Apple. If apple had 80% market share google would be getting far more search traffic.
Google on the other hand has ads. If you want to be generous you can break it out to search and YouTube. Android is obviously huge, but they don't really make money on it. The interesting thing IMO is that they likely would be making more money if they just stayed friendly with Apple. If apple had 80% market share google would be getting far more search traffic.
Lenovo is already making decent phones and in china are quite big. Perhaps they want on US market.
It's really too bad. The Moto X is my favorite phone since the Nokia N9. And I work at Nokia.
It's over, Android is finished. With Google parting hands with Motorola and abandoning Nexus all together (Google Play Edition phones will take over), the consumer is entirely dependent of consumer-oriented manufactures like Samsung. A black day for Android, a good day for Samsung its monopoly.
Nexus phones/products have always been made by external partners (HTC, Samsung, LG, etc...), none of which have ever been Motorola. Why does the Moto sale affect the Nexus line?
Have you got a good source on that abandoning Nexus thing? I saw in on The Verge forum but the source was just repeating a rumour. (http://www.technobuffalo.com/2014/01/27/google-to-kill-nexus...)
There are Google Edition devices from many manufacturers. Just keep those coming. It seems unlikely they would all choose to discontinue. Surely Google provides incentives.
You have a point and insight. This is critical to a lot of Android users. I sort of believe what you said because other sources also implied Android's head is gone and it's under ChromeOS now. we can imagine what will happen. I tried the ChromeBook for a second, even the sellers don't like it. Other than lock users to the Google platform, I don't see any value there. Really sad if what you predicted is true.
Unfortunate. I was sitting waiting for a Moto X successor to see if I could get a phone designed in the U.S./assembled in the U.S.
http://investor.google.com/releases/2014/0129.html
"Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio."
"Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio."
Despite the huge delta in what they paid for Motorola, vs what they're reported to be selling it for, other people have pointed out that the way the deal was structured may not actually wind up making it a huge financial loss for Google.
I certainly can't think of any way to spin the way this turned out to be positive for Google, but I don't think the absolute numbers will worry them all that much.
I haven't seen anyone here mention that at the time of the acquisition, Motorola was attempting to sue all the other Android manufacturers over its patents; and it was posited that Google was basically forced to buy Motorola to keep them from poisoning the ecosystem.
I assume that not happening was probably worth more to Google than what they would up having to pay for Motorola.
Psychologically, it does help reinforce the idea that Google really doesn't know what it's doing with regards to hardware (although hey, they just paid more for Nest than potentially what they're selling Motorola for).
I certainly can't think of any way to spin the way this turned out to be positive for Google, but I don't think the absolute numbers will worry them all that much.
I haven't seen anyone here mention that at the time of the acquisition, Motorola was attempting to sue all the other Android manufacturers over its patents; and it was posited that Google was basically forced to buy Motorola to keep them from poisoning the ecosystem.
I assume that not happening was probably worth more to Google than what they would up having to pay for Motorola.
Psychologically, it does help reinforce the idea that Google really doesn't know what it's doing with regards to hardware (although hey, they just paid more for Nest than potentially what they're selling Motorola for).
Google just confirmed it, and explained some of their reasoning: http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...
I'm inexplicably bummed about this. I was excited to see what Google would do long term with Motorola, and I thought the Moto X and Moto G was a great start. I thought eventually, a Google+Motorola powerhouse could provide a nice yin to Apple's yang.
I'm inexplicably bummed about this. I was excited to see what Google would do long term with Motorola, and I thought the Moto X and Moto G was a great start. I thought eventually, a Google+Motorola powerhouse could provide a nice yin to Apple's yang.
I bought my wife a Moto G. I've been pretty impressed with the device - I was hopeful for the future of Moto/Google. This is disappointing. Lenovo is an intensely boring company, they're not going to do anything fun with the Moto brand.
At least these phones don't have perfectly fine, working keyboards Lenovo could 'improve'.
To be fair, I tried a recent Lenovo laptop and in the BIOS you can swap the Fn and Ctrl-key so that they're back at where they should have been in the first place.
After that, I no longer hated working with the laptop and found it pretty decent.
That said, yes, Lenovo is the definition of a company making "boring" and über-traditional devices.
After that, I no longer hated working with the laptop and found it pretty decent.
That said, yes, Lenovo is the definition of a company making "boring" and über-traditional devices.
Oh, I'm perfectly happy with the location of the Fn key, and, admittedly, larger Del and Esc keys were also a good idea. Five-row keyboards are not (and neither are six-row chiclet-style keyboards).
Yup. I'm wondering how much it would be worth for their customers to select the type of keyboard they would like for their new T-Series... even the keyboards off the top-notch models have a much "cheaper", sloppier feel to them.
(very personal impression obviously)
(very personal impression obviously)
Can you flick a switch in the BIOS and have the missing Insert key magically reappear??
Actually, they did - Droid 4 was last in line
I'm inexplicably bummed about this.
Yeah I really thought that the Moto X and Moto G brought Moto back.
A pretty nice pure Android handset with a $179 full price is insane!
A pretty nice pure Android handset with a $179 full price is insane!
> I'm inexplicably bummed about this. I was excited to see what Google would do long term with Motorola, and I thought the Moto X and Moto G was a great start.
I think Google is a lot more interested in pointing hardware companies in the right direction and then supplying software and online services than in being a hardware company.
Particularly, Google isn't interested in weakening relationships with its hardware partners in, e.g., the OHA being a long-term strategic competitor with them.
I think Google is a lot more interested in pointing hardware companies in the right direction and then supplying software and online services than in being a hardware company.
Particularly, Google isn't interested in weakening relationships with its hardware partners in, e.g., the OHA being a long-term strategic competitor with them.
Makes me wonder how well the moto devices are going to get android updates now. To this point they've been right on top of it - now under Lenovo, who knows.
This is bad news. Motorola handsets were starting to look good. Now that Lenovo is taking over it will definitely go downhill from here.
Lenovo has been looking to enter the U.S. Smartphone for some time[0]. Acquiring a newly revitalized brand seems like a fairly good plan to do so.
0: http://online.wsj.com/news/articles/SB1000142412788732333610...
0: http://online.wsj.com/news/articles/SB1000142412788732333610...
While many seem to predict doom and gloom here, perhaps Google decided it rather gets an extra ally (Lenovo) that could produce Android phones and recoup some money they spent on the acquisition in the process? It also clears Google of any hints of favouritism towards Moto and frees up a lot of resources. I don't think Google knew what to do with a mass-producing phone manufacturer (plus its IP) under its direct control, just like a cat staring at a ball of yarn, swatting at it for some time, before running off to do something else. Verticalisation used to be the bees-knees and has a lot of lock-in potential, but I don't think that's where Google's ambition lies, I feel like it was weighing them down.
Google seems to have found a new niche to explore, though. It seems to have circled the 'Internet Of Things' on their todo list quite clearly and seem to be taking no risk of arriving late to the party. In a sense, what Apple did earlier to secure its iPhone launch, is what Google is doing now wrt the IOT. That and the smartphone market seems to be slowing down to a point of maximum saturation. Then there's not much to do for Google with a mid-tier phone manufacturer under its belt with ever decreasing margins. On the other hand, who would be a good ally to have when you were interested in the Internet Of Things? Maybe some manufacturer which produces everything from smartphones, washing machines, TVs to tanks and ships, and which coincidentally also happens to be the biggest Android manufacturer? A slightly cynical me perhaps even sees the Motorola sell-off as some sort of token sacrifice to ease all worries on both sides of the 10 year patent deal (I could imagine Samsung not releasing Tizen as a smartphone OS to compete with Android, but perhaps use it as a basis for IOT-related appliances, whatever those might be, and complement Android rather than fight it).
But that's all speculation from my side, but to be honest, I was yearning for some new technology developments, most of the land has been claimed in the space of smartphone technology and most of the battles taking place nowadays seem to be patent trolls and patent bullies doing what they do best: stink it up for everyone involved.
Google seems to have found a new niche to explore, though. It seems to have circled the 'Internet Of Things' on their todo list quite clearly and seem to be taking no risk of arriving late to the party. In a sense, what Apple did earlier to secure its iPhone launch, is what Google is doing now wrt the IOT. That and the smartphone market seems to be slowing down to a point of maximum saturation. Then there's not much to do for Google with a mid-tier phone manufacturer under its belt with ever decreasing margins. On the other hand, who would be a good ally to have when you were interested in the Internet Of Things? Maybe some manufacturer which produces everything from smartphones, washing machines, TVs to tanks and ships, and which coincidentally also happens to be the biggest Android manufacturer? A slightly cynical me perhaps even sees the Motorola sell-off as some sort of token sacrifice to ease all worries on both sides of the 10 year patent deal (I could imagine Samsung not releasing Tizen as a smartphone OS to compete with Android, but perhaps use it as a basis for IOT-related appliances, whatever those might be, and complement Android rather than fight it).
But that's all speculation from my side, but to be honest, I was yearning for some new technology developments, most of the land has been claimed in the space of smartphone technology and most of the battles taking place nowadays seem to be patent trolls and patent bullies doing what they do best: stink it up for everyone involved.
Regardless of the Google specifics, we should really have some sympathy for the Motorola employees. I doubt Lenovo will stomach quarterly losses the way Google did while they restructured. My guess is, we're going to see big layoffs.
My guess is, we're going to see big layoffs.
Sometimes, a company sells a division or wholly owned business because it is either that or massive layoffs, and it's better for morale to write down a few billion dollars than to fire thousands of people.
Even if you're working in one of the profitable businesses, a real chill goes around when the pink slip printing press starts hammering.
Sometimes, a company sells a division or wholly owned business because it is either that or massive layoffs, and it's better for morale to write down a few billion dollars than to fire thousands of people.
Even if you're working in one of the profitable businesses, a real chill goes around when the pink slip printing press starts hammering.
True, but Google has a number of unprofitable divisions. Technically, if you look at G+, Maps, and to some extent, Chrome and Android, which are given away for free, if these were separate businesses, they would bleeding money. I guess technically you could look at Chrome like Mozilla and imagine some ongoing deal to be the default search box. YouTube had no ROI for a long time, certainly longer than the 2 years Google gave Motorola.
Motorola was probably going to go bankrupt before Google bought them. Like Apple when it was bleeding money in the 90s, it needed a way to gain time to reinvent itself. Google's purchase probably prevented mass layoffs in the short term, but has Motorola been given enough time to turn itself around? I dunno. We will see what happens shortly after Lenovo takes control.
Given Motorola's history in the technology industry, it's sad to see them go under. Reminds me of Silicon Graphics, the company that basically invented the majority of the fundamental facets of modern computer graphics, gone, while people gleefully play games on their mobile GPUs unaware of where we'd be without them.
Motorola was probably going to go bankrupt before Google bought them. Like Apple when it was bleeding money in the 90s, it needed a way to gain time to reinvent itself. Google's purchase probably prevented mass layoffs in the short term, but has Motorola been given enough time to turn itself around? I dunno. We will see what happens shortly after Lenovo takes control.
Given Motorola's history in the technology industry, it's sad to see them go under. Reminds me of Silicon Graphics, the company that basically invented the majority of the fundamental facets of modern computer graphics, gone, while people gleefully play games on their mobile GPUs unaware of where we'd be without them.
"Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem."
http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...
http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...
It's hard not to draw connections between the various events of the last week or so: 1) Google/Samsung patent deal, 2) Google purchases Nest, 3) Google sells Motorola, 4) Samsung suddenly cools on Tizen.
Theory: Google gets offered the opportunity to buy Nest. Either Larry or Sergey gets serious interested. They bought Motorola because they wanted a serious stake in the hardware market. They toss up which is better - Motorola or Nest? They decide Nest is the winner. They realize the valuations are such that they could pretty much just swap Motorola for Nest. But there's a problem: Motorola was also their insurance for making sure they would always have an OEM to make Android handsets. If Samsung ever turned - they would never find themselves unable to secure a Nexus partner. So they go to Samsung, and offer a deal: patents, guarantees of support, probably other stuff: as long as you agree to make Android your flagship each year AND GPE phone version of it. This seems good enough. Motorola not needed any more and they can get a new toy to play with - Nest is the winner.
Theory: Google gets offered the opportunity to buy Nest. Either Larry or Sergey gets serious interested. They bought Motorola because they wanted a serious stake in the hardware market. They toss up which is better - Motorola or Nest? They decide Nest is the winner. They realize the valuations are such that they could pretty much just swap Motorola for Nest. But there's a problem: Motorola was also their insurance for making sure they would always have an OEM to make Android handsets. If Samsung ever turned - they would never find themselves unable to secure a Nexus partner. So they go to Samsung, and offer a deal: patents, guarantees of support, probably other stuff: as long as you agree to make Android your flagship each year AND GPE phone version of it. This seems good enough. Motorola not needed any more and they can get a new toy to play with - Nest is the winner.
I don't think Nest has much to do with it. As I see it: 1) Google and Samsung sign a sweet patent deal, 2)Samsung halts or slows down the development of replacements for Google apps and promises not to fork Android, 3)In return Google drops Motorola, a direct competitor to Samsung.
I agree with you. This may be a straight up barter with Samsung
Buying Moto handsets was a brain-fart from the beginning. It's a good day for Google shareholders that Google decided to take the perceived financial hit (in reality they had taken that hit already) and unload a small-ish mediocre handset OEM and achieve clarity in their OEM partner relationships.
The biggest red flag I had seen re Google last year were the ads Moto ads with the tag line "A Google company." I could not think of a less Google-like company than an old-line handset OEM.
The biggest red flag I had seen re Google last year were the ads Moto ads with the tag line "A Google company." I could not think of a less Google-like company than an old-line handset OEM.
This is just a bit over the top.
Samsung was a Nexus partner 1 time. (2 if you count the play edition s4)
They've worked with LG and HTC multiple times.
Samsung was a Nexus partner 1 time. (2 if you count the play edition s4)
They've worked with LG and HTC multiple times.
Thrice. Nexus S, Galaxy Nexus, and Nexus 10.
[deleted]
Better article: http://investor.google.com/releases/2014/0129.html
Assuming that google keeps the majority of/important patents then they basically bought the patents for $4.74 billion. They sold the "set top" division for $2.35 billion and now they're selling the mobility division for $2.91 billion. They also kept about $3 billion in cash that Motorolla was holding when they bought them for $13 billion.
That's not even counting whatever tax incentives they get from these deals. So all in all, it isn't as bad of a deal as it looks like on the surface (in fact I assume it is what Google was planning from the beginning).
Assuming that google keeps the majority of/important patents then they basically bought the patents for $4.74 billion. They sold the "set top" division for $2.35 billion and now they're selling the mobility division for $2.91 billion. They also kept about $3 billion in cash that Motorolla was holding when they bought them for $13 billion.
That's not even counting whatever tax incentives they get from these deals. So all in all, it isn't as bad of a deal as it looks like on the surface (in fact I assume it is what Google was planning from the beginning).
Curious: why would a deal like that have tax incentives?
Tax benefits from the purchase I think. They were saving something like $700m a year in taxes for a bunch of years following the purchase. I forget the details.
Motorola was bleeding money when Google purchased them. Google can deduct the operating losses from their profits to reduce their tax burden.
In addition, Motorola likely has many depreciating capital assets, and when the loss was booked by the sale, they can also write those off from their profits. A deal like this will have tons of tax lawyers going through them to maximize their benefits.
In addition, Motorola likely has many depreciating capital assets, and when the loss was booked by the sale, they can also write those off from their profits. A deal like this will have tons of tax lawyers going through them to maximize their benefits.
super-terrific, (non_)mathematical-ish analysis of their original purchase of Motorola (from 2012).
http://brandnewgames.tumblr.com/post/26984798194/commuter-tr...
http://brandnewgames.tumblr.com/post/26984798194/commuter-tr...
With the sale of Motorola, the intro of Chrome Apps for Mobile, the stepping down of Andy Rubin - is Google losing interest in Android?
When will we see ChromeOS for Mobile?
Did Andy step down or finally have an opportunity to peruse his dream?
> For Rubin, manufacturing is a return to the past. According to a 2007 profile, Rubin began as a robot engineer at lens manufacturer Carl Zeiss and had a brief stint at Apple as a manufacturing engineer before devoting his working hours to developing computers instead. However, robotics remained a hobby, with Rubin both building his own and amassing a collection of robots from Japan.
> For Rubin, manufacturing is a return to the past. According to a 2007 profile, Rubin began as a robot engineer at lens manufacturer Carl Zeiss and had a brief stint at Apple as a manufacturing engineer before devoting his working hours to developing computers instead. However, robotics remained a hobby, with Rubin both building his own and amassing a collection of robots from Japan.
Could very well be! And why not follow your dreams when you're rich?
Fact still remains that Android is now under ChromeOS chief Sundar Pichai.
Best move all year for Google.
Owning Moto's handset business was a goiter on Google, and the lack of clarity on Google's intentions might have been necessary to extract maximum value from this sale, but it was very bad in every other way.
Owning Moto's handset business was a goiter on Google, and the lack of clarity on Google's intentions might have been necessary to extract maximum value from this sale, but it was very bad in every other way.
Good move. Nipping it in the bud is better than dredging it along years and eventually 'writing it off' like a certain company.
As a Verizon customer who's reliant upon Dev Ed handsets, let me just say that this sucks.
Is it a signal that ARM based handset business (and technology) is peaked?)
What!? But... I loved the Moto G. And honestly, I don't get the love people have for Lenovo. Thinkpads are... okay. Lenovo's ownership of the brand could be described as stewardship at best. But they took the leading brand in PC laptops and kept it the leading brand in PC laptops while tablets and Apple destroyed the entire market for PC laptops.
Lenovo will never do anything great with the brand. Google had promise.
Lenovo will never do anything great with the brand. Google had promise.
I know this is a fantasy at best, but I keep fantasizing they're doing this so they can have the cash liquid... to buy Nintendo. Or Sony.
I like Google's attitude towards hardware and I want them in the gaming industry.
I like Google's attitude towards hardware and I want them in the gaming industry.
So we can finally get all the AAA titles for free and covered in ads!
Nintendo is on sale?
Last time I checked they declined $25 bln Microsoft offer
Last time I checked they declined $25 bln Microsoft offer
The thing that always surprised me was how quick Google was to get out of the set-top business. That seemed like a pretty incredible opportunity to me.
It seems to me that this must have been the intention all along. When Google purchased them, Motorola was about to start suing other members of the Android ecosystem because they were that desperate. So the deal was always defensive. I think the value of Motorola's IP was always overstated and Google knew that but it made for a good story for shareholders along with Google signalling they were serious about hardware. And maybe they are, but the whole "American made" angle they took and all the tax incentives they got, and for what...to sell the company 7 months after launching a flagship phone??? It's a great phone, but it looks to me like this whole thing was set-up to sell out from the start. If so, it was a brilliant unwinding of something that could have been very bad for Android at a critical time. As others have pointed out, they didn't take as bad a bath financially as it seems either.
The alternative narrative is that they suddenly had a change of heart because of Nest, but why not just integrate or put that team in charge of Motorola if it's about talent?
In any case, the Moto X is a really nice phone. I feel bad for the employees of Motorola and find this maneuvering very "corporate" and un-Googley.
The alternative narrative is that they suddenly had a change of heart because of Nest, but why not just integrate or put that team in charge of Motorola if it's about talent?
In any case, the Moto X is a really nice phone. I feel bad for the employees of Motorola and find this maneuvering very "corporate" and un-Googley.
Google are corporate, they were the good guys.
The timing of this (vs. the Google/Samsung arrangement) really makes it look like Google's involvement with Motorola was simply to intimidate Samsung. The message was we'll piss away our advertising revenue to destroy you if you don't do what we want. Short term success maybe but in the long term it puts Google firmly on the Microsoft track. You can only gain so much via intimidation.
Alternate theory: this is samsung throwing their weight around. Google purchased Moto because they wanted to get into the devices business, Samsung tells google to get rid of it or else they will continue to diverge their ~70% of the android market away from google's version of android.
Google clearly wants to be a hardware manufacturer: they've been circling the market for a while now, trying different things: they bought moto, they bought nest, they keep doing nexus devices, glass, the ever-growing lineup of google play editions, chromebooks... I don't think they bought moto just to be a bully, or just for the patents.
Google clearly wants to be a hardware manufacturer: they've been circling the market for a while now, trying different things: they bought moto, they bought nest, they keep doing nexus devices, glass, the ever-growing lineup of google play editions, chromebooks... I don't think they bought moto just to be a bully, or just for the patents.
It's a tangent but I'm a little disappointed by this latest executive-level assault on the language, from Larry Page:
> So until then, it’s business as usual. I’m phenomenally impressed with everything the Motorola team has achieved and confident that with Lenovo as a partner, Motorola will build more and more great products for people everywhere.
http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...
"Partner." Yeah...
> So until then, it’s business as usual. I’m phenomenally impressed with everything the Motorola team has achieved and confident that with Lenovo as a partner, Motorola will build more and more great products for people everywhere.
http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...
"Partner." Yeah...
Very interesting! Lenovo's laptops seem good quality to me.
Hopefully this will make my Atrix and Lapdock more sought after.... and my Xoom..... (perhaps too much Motorola hardware???)
Hopefully this will make my Atrix and Lapdock more sought after.... and my Xoom..... (perhaps too much Motorola hardware???)