Google today confirmed officially that it has sold off its Motorola smartphone business to Lenovo of China for US$3 billion. Much less than the US$12 billion Google paid for Motorola in 2012.
According to our Wireless Smartphone Strategies (WSS) service, the combined entity of Lenovo and Motorola captured 6% share of global smartphone shipments in 2013.
As a result of this new deal -- assuming it is approved by US, Chinese and other authorities -- Lenovo-Motorola becomes instantly the world's 3rd largest smartphone vendor by volume, behind Samsung (32%) and Apple (15%).
For Lenovo, it is a good move. The Chinese vendor gets access to the valuable US smartphone market and the fast-growing Latin America region. This complements its existing global PC business.
For Motorola, it gains access to an ambitious sugar daddy that has a strong presence in the huge China market.
For Google, it divests a loss-making hardware division.
Companies that will be worried by the Lenovo-Motorola deal include Samsung, Apple, LG, Sony, Huawei, ZTE, Xiaomi, Coolpad, TCL-Alcatel and others.
Lenovo now has extra scale in smartphones and a seat near the top table. However, whether Lenovo can turnaround the long-struggling Motorola business, and what happens to the Motorola brand long-term, remain key questions that will need to be answered in the coming months.