Lenovo saved the IBM PC, but can it save the Motorola smartphone?

Lenovo acquires Motorola from Google to try to rehab another former tech icon gone bust

Motorola was struggling long before Google bought its smartphone division in 2011 for $12.5 billion, but the situation grew worse under Google's ownership. Exhibit A: Google sold off its ALM security business, cementing Android's status as untrusted platform for enterprise. Google also decimated the Motorola staff, already psychically damaged from watching its steady decline following bursts of glory, such as 1996's StarTAC and 2004's Razr.

Meanwhile, Google continued to produce its own Nexus line of smartphones and tablets, and it stepped up their quality dramatically. Soon, products like the Nexus 5 smartphone and Nexus 7 tablet got better reviews than Motorola's own offerings like the Moto X. Even as Google failed to take advantage of Motorola's hardware know-how, it was turning to competitors like LG and Asus and getting better results. Plus, Google seems to have fallen in love with robots, buying a mess of such companies -- executive attention to and support for Motorola Mobility is likely more diminished than ever now.

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The early conventional wisdom was that Google bought Motorola for its patent portfolio, which it saw as key in its battle with Apple, whose then-CEO Steve Jobs went nuclear after Samsung used patents against it and Motorola and other Android makers jumped in. The legal battles are hardly over, but Apple has won the great majority of them (with help from Microsoft), calling into question the usefulness of Motorola's patents as a weapon against Apple. Plus, Android smartphones outsell iPhones by a margin of three to one, so patent weapons aren't as needed today as they may have been a few years ago.

Thus, it wasn't a huge shock to learn that Lenovo is buying Motorola Mobility. The $2.9 billion price is a surprise -- less than a quarter of what Google paid for it three years ago, though the lower price also reflects the fact that Google is keeping most of Motorola Mobility's patents and the fact it had sold off Motorola's set-top box business earlier for $2.4 billion. Plus, Google is keeping the advanced products research team from Motorola Mobility.

For Google, selling Motorola ends a bad result. And the deal makes a lot of sense for Lenovo. Lenovo already makes Android smartphones and tablets in addition to Windows PCs and tablets, even some high-end models like the Vibe. But its mobile business is targeted to a few poorer countries like India. It's not a player in the true money markets: Japan, South Korea, Taiwan, Singapore, North America, Europe, and the rich pickets of China, Russia, South Africa, and the Middle East.

If you follow the money, you'll find Motorola Mobility, along with Samsung, HTC, LG, and Apple. You'll also find Lenovo PCs. But not Lenovo mobile devices. The Motorola name can help fix that. It also helps that the other Motorola -- Motorola Solutions, now an independent company that makes industrial communications and mobile gear -- is respected within its niche markets.

In a world where mobile devices are slowly but steadily supplanting PCs, Lenovo doesn't want to get stuck with Windows. Buying Motorola Mobility offers the chance of a faster exit, or at least diversification, strategy.

Of course, the Motorola brand doesn't mean what it did in the 1930s (when it invented the car radio) or during even the mid-1990s and mid-2000s (its mobile phone heydays) It's no longer leading-edge or even leading. But it has a history and a cachet. Plus, Motorola didn't commit marketing suicide by producing junk, as many American TV brands did when they could no longer hold off the Japanese (remember Zenith or RCA?) -- or as Sony did with its product lines more recently.

But when Lenovo bought IBM's PC business in 2004, it did an excellent job of preserving and even improving the brand. Many of us felt that the ThinkPad's glory days were soon behind it and IBM was jumping out of the market for good reason. Yet that fall didn't occur. Lenovo PCs continue to sell well -- in fact, they've grown where most PC makers' sales have declined -- and they are considered to have stronger quality than Dell's PCs, once the go-to brand for corporations but sullied by a series of corner-cutting moves that made its products unreliable for several years. Lenovo, in fact, is on par with Hewlett-Packard, whose PCs' quality remains solid, in the business market.

I don't know how bad the internal damage is at Motorola Mobility due to Google's rough handling. IBM hadn't abused its PC division before selling it to Lenovo, so there was less risk of implosion from being hollowed out. I strongly suspect Lenovo has done its due diligence, though, and that the purchase is one Lenovo can make good on.

This article, "Lenovo saved the IBM PC, but can it save the Motorola smartphone?," was originally published at InfoWorld.com. Read more of Galen Gruman's Mobile Edge blog and follow the latest developments in mobile technology at InfoWorld.com. Follow Galen's mobile musings on Twitter at MobileGalen. For the latest business technology news, follow InfoWorld.com on Twitter.

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