On January 29, 2014, after just a year and a half of working together, Google announced that it was going to sell the Motorola Mobility smartphone division to Chinese manufacturer Lenovo for nearly $10 billion less than they purchased the unit for. Since the acquisition was so short lived, it is worth looking into why exactly Google would buy and sell this division so quickly. This is Google we are talking about. They always seem to have some master plan that ends up with them increasing their profits.
Although it was enticing for Google to have a specific hardware division to go along with their world-class software development, their main goal for purchasing the Motorola Mobility division was to gain leverage on companies such as Apple and Microsoft in the patent litigation cases. From that standpoint, although they "lost" $10 billion in the sale, they gained an equally or more valuable patent portfolio that will allow them to hold their own in these lawsuits.
On another note, Google CEO Larry Page realized that the smartphone market exceeded the competitiveness that Google wanted to partake in, if they were to continue manufacturing phones. The move will allow Google to make huge ripples in the Android ecosystem with more flexibility and freedom, something that has been at the heart of Google's expertise for years now. To prove that the $10 billion "loss" was in fact a gain, Google's shares actually rose 2% immediately following the deal.
The fact that Google's shares went up immediately proves that the consensus on this deal is to Google's advantage. It seems smart that Google sells the hardware division so the company can focus on their strengths, rather than trying to add on another division that they don't particularly need at the moment.
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