Last week smacked us with some crazy, unexpected news we’re still not quite sure how to take. Of all companies, Lenovo purchased Motorola for $2.91 billion.
Let’s take it back minute first, though.
On August 15, 2011, Google announced plans to purchase Motorola Mobility for $12.5 billion. Not only would Google gain Motorola as an (independent) in-house hardware manufacturer, but it would also gain Motorola Mobility’s expansive patent portfolio to “help protect the Android ecosystem,” in the words of Google.
To no surprise at all, speculation and loaded questions filled the mobile realm. Why would Google purchase one of its partner manufacturers? Will Google gut Motorola for its patents and let such a historic and legendary company die? How will this affect Google’s other partners? How will this change the path of Android? And this is just a small sample of how the tech world responded to the announcement.
That purchase was finally given the green light on May 22, 2012 and the speculation started all over again, and rightly so. Motorola was, at the time, a dying brand (at least on the consumer side of things) which was bleeding out all its market share, as well as mind share and profits. Its efforts, devices, and impact were paltry by comparison. And, before the purchase, it seemed as if Motorola couldn’t gain the necessary traction to turn things around.
Once the sale was finalized, Google assured everyone Motorola would remain a separate company. But at the same time, Google’s Dennis Woodside stepped in to take Sanjay Jha’s place as Motorola CEO. We had a feeling the company’s direction would begin to turn – not only because Google’s purchase, but also because Motorola was in need of a new vision.
It took several months to see the effects of Motorola being “a Google company.” The product lineup which followed that September – DROID RAZR M, DROID RAZR HD, and DROID RAZR MAXX HD – were very much part of the earlier Motorola. The software was very stock-like, but had its fair share of tweaks throughout the OS, and the hardware was increasingly drab (both inside and out).
In hindsight, the X Phone (or XFON) is particularly interesting. It was one of the most wildly rumored smartphones in recent history. Pieces of the puzzle were incredibly sparse, and the overactive imaginations led to wild spec rumors and expectations.
The X Phone later turned out to be none other than the Moto X, a flagship smartphone from Motorola with meager specifications and the option to pick and choose your colors via an online customization portal, Moto Maker.
As modest as the Moto X was, reviewers and practically all who used it fell in love quickly. Just minutes after using it, I remembered that specifications are not everything, the fact that its display was 720p and not 1080p like most other flagships didn’t matter, and I stopped worrying about every little detail. No, the camera isn’t great. And at times I wish the display was a tad larger. But it was easily the best and most well-rounded smartphone I used in 2013.
Why is this? How did Motorola make such a highly regarded smartphone without going over the top and turning every knob up to 11?
Value. While other OEMs have been harping on specifications and great marketing tactics, Motorola focused on value and user experience. It’s pretty simple, really.
Continuing the same trend, the remarkably affordable Moto G followed soon thereafter, even lighter on the specifications and with a much lower price point. The 8GB model was introduced at $179 and a 16GB model was available for $199. And my verdict in the review was that while it isn’t my first choice in smartphone, it’s one I could use without complaining. For the price, it’s a fantastic bargain. But even if it were double the price, it would still be a great phone.
Suffice it to say, Motorola has stumbled upon a golden opportunity to turn the market in its favor – value over specs, user experience over dozens of useless features, and impeccably timed software updates. With precisely calculated shots, Motorola was able to rally troves of supporters and pique the interests of thousands.
Motorola seemingly gained this new wisdom and great direction from Google – or Google’s Dennis Woodside at the very least. Once (and if) the sale completes, Motorola’s fate is entirely in the hands of Lenovo, a company whose expertise in the smartphone market is practically zero.
And this is exactly why Lenovo purchasing Motorola worries me.
There is speculation that suggests Motorola’s decision to produce fewer phones with lower profit margins wasn’t panning out. And it isn’t difficult to see how it wouldn’t work out, when you consider the actual sales of the Moto X were not at all impressive – only 500,000 had sold by mid-November.
If that’s the case, it could be a quick trip back to being the ol’ mundane smartphone OEM for Motorola, producing more phones and spending less time perfecting each new product and ironing out the kinks. The outcome could very easily be a rehash of the DROID RAZR brand – phones which weren’t bad, but were far from spectacular.
Motorola has a lot of momentum going right now, despite losing profits. Its mind share is higher than it’s been in ages, and its market share is slowly bouncing back. The New York Times’ Eric Pfanner notes no mobile company has “managed to climb back after falling from the heights.” Motorola is on track to break that trend.
And it’s all up to a company I have no history or knowledge of to continue that momentum and growth.
It’s not impossible and I’m not saying Lenovo doesn’t have the capacity to keep the wheels turning. But I’m notably less hopeful for the future of Motorola, and a lot of people are right there alongside me.
The Moto X successor was the phone I was looking forward to most in 2014, and it still should be, considering the amount of time it takes for deals like this to gain approval and complete. If it’s a true continuation of the existing Moto X, I will be ecstatic. But if the deal goes through quickly Lenovo dips its hands too deep into the cookie jar, we may loose the most exciting mobile lineage since the glory days of Research In Motion.