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Should Apple Be Worried That Google Unloaded Motorola?

Should Apple Be Worried That Google Unloaded Motorola?

January 31, 2014
Back in 2012, Google paid $12.5 billion for Motorola Mobility. Two years later, they sold it to Lenovo for $2.91 billion. This development is bad news for Apple, according to CNET. Current Analysis analyst Avi Greengart explains that unloading Motorola allows Google to once again concentrate on software. He notes “Getting rid of Motorola helps Google, and anything that Google can do to create a more cohesive user experience across vendors is competitive to Apple.” Neil Mawston, the executive director of Strategy Analytics, suggests Lenovo’s acquisition of Motorola will hurt Apple in China. "Apple's lack of presence in the lower end of the smartphone market has cost it sizable volumes in China in recent years,” he explained. As part of the deal, Lenovo gets the Motorola brand, which includes the Moto X and Moto G product lines. Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, while Lenovo will receive over 2,000 patent assets.

Will this really hurt Apple?

Google’s Android already bests Apple’s iOS in terms of market share. Apple is stronger in terms of revenue and profit. I’m not sure how this changes for Google without Motorola. Besides, when was the last time someone selected a Moto X over an iPhone? It is no secret that Apple needs to find success in the Asia Pacific region. Just yesterday, for example, Fortune noted that Apple’s revenue is increasingly tied to its performance there. Therefore, Apple should be more worried about what the Lenovo/Motorola deal means for its business in China. Right now, Lenovo is one of the fastest growing smartphone makers in China. The company is now the second largest smartphone vendor in mainland China by volume, and the fifth largest worldwide. Until now, Lenovo has focused on the low-cost end of the smartphone market -- where, as the iPhone 5c proved, Apple has refused to go. Does Lenovo owning Motorola change this? I'll ask the question again: When was the last time someone bought a Moto X instead of an iPhone? We'll continue to follow this story. In the meantime, what do you think? Should Apple be worried now that Google has sold Motorola?

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