Motorola will soon no longer be a Google company. Lenovo is going to buy the mobile arm of Motorola for just under three billion dollars.
The buyout arrives just as Motorola is starting to regain its position as a phone-maker to consider, too, having made our budget phone of last year, the Moto G. Does this move to becoming part of Lenovo mean an end to great Motorola phones?
A Lenovo-led Motorola may see it ditch the vanilla approachOne of the winning elements of the Moto G and Moto X is that they both use near-standard versions of Android. Many people have put this down to being part of the Google corporation, with some reasoning too.
Before being bought by Google, Motorola used a largely ill-advised social network-obsessed interface that – as with most custom Android interfaces – cluttered up the phone a bit. Lone manufacturers tend to become obsessed with the need to put their own stamp on their phones, beyond the logo on the back.
And it’s generally to the detriment of their phones. They care more much more about their identity than we do. Lenovo’s own phones already use a custom, not particularly attractive, interface – so Motorola may slip back into its old ways.
You won’t have seen many Lenovo phones on the shelves of your local phone shop, but it has produced loads of mobiles to date.
Lenovo’s phones have not been much cop to date
Last year we looked at the company’s former flagship, the Lenovo K900. It’s an interesting-looking phone and has a metal body, but wasn’t quite a match for the biggest rivals from Samsung, HTC and Sony.
It is also affected by Lenovo’s tight relationship with Intel. It uses an Intel Atom processor – it’s powerful, but there are reasons why every other big phone maker uses Qualcomm chips. Support is better. If Motorola is forced to use Intel chips, it could negatively affect future Motorola phones.
A lack of IP means it may not be able to pull off the same featsThe reason why Google bought Motorola Mobility for 12 billion dollars and sold it for three is that it stripped the company of most of its patents before selling it. Patents are what enable companies to use technologies without having to pay expensive licensing agreements with patent owners. And failing to do so can result in extremely costly legal battles.
Lenovo has its own share of patents, and there are a few little stringy bits of IP flesh left on Motorola’s bones. But without the old library of Motorola patents to hand, making a new phone as cheap and good as the Moto G may simply not be possible.
It may no longer have access to the same supply chainWhen we talked to Motorola at the launch of the Moto G, it said the key to getting the price so low was the supply chain. It’s not just having the right manufacturing partners, but also having the confidence to produce the phone at a scale high enough to bring down the individual cost of producing the phones. To grossly oversimplify, the more you make of something, the cheaper it gets to make.
This doesn’t just require relationships, it also requires confidence and investment. Whether Motorola and Lenovo will have what it takes in either respect to produce a phone as bold as the Moto G remains to be seen.
It’s not looking too good for Motorola so far. However, it’s all too easy to put the company back into the ‘has been’ box. Here are the reasons why we should still take the company seriously.
No it’s not game over for Motorola, because…
The Moto X and G were Motorola phones, not Google phonesMany people assume that after Motorola was bought out by Google, its phones became Google phones. However, talking to Motorola’s CEO Dennis Woodside this doesn’t seem the case.
Motorola claimed vehemently that its mobile teams are completely separate from the ‘Nexus’ teams that make the official Google phone. It always remained a separate company, with its own head office that is 2,000 miles away from Google’s. According to Google’s own Maps service, it’d take 31 hours to drive between them.
Motorola Mobility is already a significantly slimmed-down operation. It is a company that has been significantly restructured since Google took it over. 4,000 jobs were ‘trimmed’ in August 2012, another 1,200 in March 2013.
Google made the company leaner, not fatter
While it may have been losing money still recently, it is not a company that has grown fat and bloated sipping on the honey of Google’s financial reserves. It’s a lean operation compared with what Motorola used to be.
Motorola CEO Dennis Woodside talked to us recently and made it sound like it was emerging from the dark times of restructuring – "Having Google own the company has given us the opportunity to reshape the company and invest financially in a way that if you were public would be really hard to do so we’ve been investing in branding and new products. We had 20k people now we have 3.4k people a massive difference in staffing levels and all that costs money. Google has been able to help us get through that transition."
It’s in this shape that the company released the Moto G – and perhaps why Lenovo found the buy-out viable.
Lenovo has a history of doing right by established tech brandsAlthough Lenovo is not a household name in the UK, it is not the first time it has taken on a beloved tech brand. In 2005, Lenovo bought ThinkPad, the PC arm of IBM.
Almost nine years on, Lenovo ThinkPad laptops are consistently some of our favourites each year. And, crucially, Lenovo has kept what always made ThinkPad laptops special rather than trading away their original selling points in favour of producing something a little more mainstream.
Motorola still has plans, recent plansA deal like the Lenovo buyout of Motorola doesn’t happen in days, and just a few weeks ago Motorola told us about its plans to push further the sort of idea started with the Moto G – a good, cheap phone.
"Delivering on that value promise is super important. I mean why can’t these devices be $50? There’s no reason that can’t happen so we’re going to push that," said CEO Dennis Woodside.
This doesn’t mean we’ll see a Moto G-quality phone for £30, but does suggest Motorola is still planning on continuing the aggressive quality-to-price goals it set in place with that phone. We hope so because its approach to its recent phones in refreshingly simple and very effective.
Next, read our Moto G tips and tricks round-up