US search giant Google Inc. (NASDAQ: GOOG) is expected to sell the brand Motorola Mobility and the buyer was likely to be a Chinese one.
Google acquired Motorola Mobility for USD 12.5 billion in August 2011 and of the consideration, USD 5.5 billion was for intellectual property, USD 2.9 billion for acquisition in cash, USD 2.6 billion for goodwill, USD 730 million for client relations, and USD 670 million for other net assets.
People in the know disclosed that in order to own up to 17,000 patents of Motorola Mobility, Google made the deal and judging from a series of moves the target took later, the brand Motorola Mobility was likely to be sold one day. Firstly, many top executives of the target including CEO, CFO and COO stepped down in succession after the deal. Secondly, it launched a 4,000 layoff globally in August 2012 and the number of those laid off in the China region exceeded 1,200. Thirdly, it quit the South Korean market in November 2012. Fourthly, its manufacturing plants around the globe were sold in succession. Fifthly, it sold set-top box business, from which it always earned money. Lastly, it announced a 1,200 layoff in March this year and the number of those laid off in the China region was about 800. And after that, the number of its staff in the China region would be less than 200. In addition, it had not launched any knock-out products since the deal. Notably, it saw share in the global smartphone market hit only 1.9 percent in the fourth quarter of last year and for the first quarter of this year, it reported a loss of USD 179 million. And in the Chinese market, it embraced a sales volume of less than 400,000 units in the quarter. All those indicated that Google did not think highly of it and would not continue investing in it. In other words, the brand Motorola Mobility would be sold sooner or later.
He reiterated that provided that Google sold the brand, the buyer was likely to be a Chinese one and there would be great possibility for it to be one of the three, namely Lenovo Group Ltd. (SEHK: 0992), Huawei Technologies Co., Ltd. and ZTE Corp. (SZSE: 000063 and SEHK: 0763). A top executive responsible for terminals at Huawei, one of the biggest two telecom equipment and network solution providers in the Chinese market, said in an interview in March this year that it kept a close eye on the brand.
