In the wake of yesterday’s Reuters story and later confirmation of the $2.91 billion sale of Google’s Motorola hardware unit to Lenovo there were many theories presented about why the deal happened. Here is a summary of those theories and ideas:
- Google is simply “cutting its loses” and recovering what money it can on a generally bad deal (perhaps save the patents)
- Google wants the best for Motorola and Lenovo is a better home for the unit
- Google is “making peace” with Samsung, its most important Android partner, by no longer being a direct competitor
- Google is appeasing European regulators by exiting the mobile handset business ahead of its potential antitrust settlement in Europe
There are varying degrees of truth in all of these explanations. Google is a company, I’ve learned over time, that rarely has a single motivation for the actions it takes.
There was another theory that occurred to me after I quickly wrote the initial story yesterday, which I haven’t seen discussed. In some ways it’s the opposite of the “making peace with Samsung” notion.
I believe that Google sold Motorola to Lenovo, at least in part, to help the Chinese company become a counterweight to Samsung’s global dominance of the Android market.
Google bought Motorola in 2011 for patents but also hoping that it could develop successful Android handsets that would help “diversify” the market. Google always publicly says that there are large numbers of Android OEMs, but today there really is only one that matters: Samsung. Although, more recently, Chinese makers have been making gains with low-cost Android phones.
Nonetheless, Samsung has made its brand synonymous with Android. Indeed, Samsung’s brand is more powerful and recognized than Android itself. For its part, the Korean company has always been ambivalent about using Android and thus being “dependent” on Google. As with other OEMs, Android was the only place for Samsung to turn following the introduction of the iPhone.
Samsung would much rather have been able to make a global go of its own operating system. To that end, it has increasingly tried to tweak and modify Android, without completely “forking” it (a la Amazon). It has added its own interfaces and proprietary software that depart from the classic Android UI and UX to “own” Android and differentiate from other Android handsets. Now, apparently, Google has persuaded the company to roll some of that back.
Of all the other Android OEMs, Lenovo seems to be best positioned to directly challenge Samsung. Though obviously unexpressed, that may be Google’s biggest strategic reason for the sale.