Google sold off its Motorola Mobility unit to Chinese manufacturer Lenovo for $2.91 billion earlier this week, and many analysts are saying the deal could be a win-win.
Lenovo’s stock immediately fell 8.2% after news of the deal broke, with many investors concerned that the company overpaid for an underperforming division. However, Shara Tibkken at CNET notes that Lenovo has a history of capitalizing on acquisitions, becoming the world’s largest PC maker after buying IBM’s PC division for $12 billion in 2004. Lenovo may be best known to American consumers for their low-end, efficient laptops, although the company is China’s second-largest smartphone vendor by volume. Lenovo also recently hired celebrity endorsers like Kobe Bryant and Ashton Kutcher, which will provide a worldwide marketing advantage and potentially help the company move up from its fifth-place position in international smartphones sales.
Google, which originally purchased Motorola Mobility for $12.5 billion in 2011, will be taking a $6 billion financial dive on the deal, according to the Wall Street Journal, but can now focus on what they’re really good at: the future. The search giant made two particularly game-changing acquisitions in the past two weeks — worth a total of $3.6 billion — with their acquisitions of artificial intelligence startup DeepMind and ‘Internet of Things’ giant Nest. Dumping a smartphone hardware unit and adding two fantasy-esque computing divisions seems to fit CEO Larry Page’s goal of ‘moonshots’ — even if not all Wall Street analysts are immediate fans of the Lenovo deal.