Motorola Reports $384m Loss and No Wonder Google Sold Them to Lenovo

A day after the big shocker that Google sold Motorola to Lenovo for $2.91 billion, we have our clear reason. No surprise, it’s all about the money and Google is no exception.  Since Google bought Motorola in 2011 for $12.5 billion it has reported an operating loss every year. Although the company is on a turnaround it is not clear at what point it would actually make a profit. I think this was a major reason for the sell off but doesn’t tell the whole story.

The main reason that Google bought Motorola in the first place was for its patents. Originally Google was hoping to use the patents to fend off and go on the offensive again companies attacking Android.  But that really did not work as planned and the patents wear not holding up in court. Meanwhile Google was spending time and money to help Motorola turnaround its mobile division.

But making Motorola into a successful hardware manufacturer for Android was not in the best interest of Google. That goes against what Google wants to accomplish with Android and puts it in direct competition with other Android manufacturers like Samsung, Sony, and others. Google’s main goal is to use Android as a means to reach consumers with their software on an open platform. So it needs the help of other hardware manufacturers to distribute its software.

Taking all that into account and the continuing bleeding that Motorola was incurring every year, it was clear that it had to go. Luckily Lenovo wants to enter the mobile market in the U.S. and is a great hardware company. Therefore its a perfect match for Google to sell Motorola to  Lenovo to recoup some money. In the process it will retain the valuable patents that was the original reason it bought the company.

Many Android fans were hoping that Motorola would become the hardware arm of Google and start making devices for them. But from the very beginning Google had mentioned that this was not going to be the case and it stayed true to that. Although disappointing for fans, we have to be realistic about things. Google is a public company intended to make money and selling Motorola was a good business decision. Let’s see what the future holds for Motorola. I’m sure they won’t be going anywhere soon.