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Lenovo to reportedly buy Google's Motorola Mobility for $2.9 billion [update: confirmed] - Page 6

post #201 of 235
Quote:
Originally Posted by ExAequo View Post

Let's make a quick calculation:

DEBIT:
1. Acquisition cost: USD 12.5bn.
2. Losses of Motorola since acquisition: USD 1.0bn

CREDIT:
1. They sold a division to Arris for USD 2.3bn
2. They sell the rest of Motorola to LENOVO for USD 2.9bn
3. From the 20 000 patents (estimated to be worth USD 5.5bn at the time of acquisition), they only sell 2000 to LENOVO and grant exploitation rights on the remaining ones.

BOTTOM LINE:
If the patents are really worth USD 5.5bn, they still loose USD 2.8bn. Not bad.
I still can't imagine what would have happened if Apple would have done the same.

 

Those patents are not worth even close to $5 billion, not even close.

So far they have collected a grand total of $10 million from those said patents.

 

Look at Apple.  Apple has amazing patents against Samsung and they were only able to get $800M.  You really think the Moto patents are worth SEVEN TIMES more than Apple's?

 

Let's also not forget the cost of transaction.  Usually investment banks get 3-4% transaction fee.

Lawyers fees.

Layoff employees, severence

Golden parchuttes to pay

Don't forget those tax breaks will take YEARS to realize.  So we are talking millions in time value.

Also what about all the LABOR costs in intergrating Moto to Google.

 

They lost BILLIONS on this deal.

post #202 of 235
Quote:
Originally Posted by ItsTheInternet View Post
 

 

The frustration at Google making a savvy move and being rewarded just oozes out of your posts. Why so partisan TS? Do you own AAPL or are you just a massive fan?

 

This is like saying its savy to pay $3,000,000,000 for a toilet since it can be a tax write-off.

 

Google lost BILLIONS on this deal.

 

Its hilarious that the GOOG investors are not punishing the BOD and Executives for this blunder.  This will only lead to more stupid decisions and wastes of BILLIONS (Nest anyone?)

post #203 of 235
Quote:
Originally Posted by sog35 View Post
 

 

This is like saying its savy to pay $3,000,000,000 for a toilet since it can be a tax write-off.

 

Google lost BILLIONS on this deal.

Right but they paid those billions quite a while ago. What they have done now is to unload a loss-making asset for $3B while keeping hold of some of the potentially valuable IP which is what they needed after all.

 

So what if the overall loss is a few billion? That was already off the credit sheets when they spent $12B initially and now Google's profits are inflated by whatever loss MM isn't making for them.

post #204 of 235
Quote:
Originally Posted by ItsTheInternet View Post
 

Right but they paid those billions quite a while ago. What they have done now is to unload a loss-making asset for $3B while keeping hold of some of the potentially valuable IP which is what they needed after all.

 

So what if the overall loss is a few billion? That was already off the credit sheets when they spent $12B initially and now Google's profits are inflated by whatever loss MM isn't making for them.

 

Google was expecting to pay $5.5 billion for the patents regardless of future outcome.

 

They paid less than that in the end.

 

Most of the patents are still owned by Google, so they are still owned property... no loss as far as Google is concerned. Just the same as the Nortel patents that Apple owns.

 

As you say, it's past history to Google... and they are even getting something in return for dumping MM.

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post #205 of 235
Quote:
Originally Posted by Danox View Post
 

 

This deal means Google has given up on Hardware despite what they say, and brings into question if they can ever be competitive in making hardware at a profit on anything so far they can't even come close. The ball has been punted to Microsoft.

I don't think Google has actually tried its hand at hardware. They bought Motorola back in 2011 and it took 18 months for Motorola to empty its existing pipeline of products. The only two handsets Motorola newly designed while under Google's ownership were the Moto X and Moto G. During this whole time Motorola claimed to be operating essentially independently of Google, without special access to Android. Google could never have gone all in as a smartphone manufacturer anyway without destroying its relations with all the other Android makers.

post #206 of 235
Quote:
Originally Posted by Crosslad View Post


Google are expected to announce revenues af around $17billion with net profit at about 16%. And the company is valued at around 80% of Apple and closing on a daily basis. They will soon pass Apple at this rate. WTF is up with Wall Street?

 

Why don't you read a book about how companies are valued? Google has much faster growth than Apple.

post #207 of 235
Quote:
Originally Posted by ItsTheInternet View Post
 

Right but they paid those billions quite a while ago. What they have done now is to unload a loss-making asset for $3B while keeping hold of some of the potentially valuable IP which is what they needed after all.

 

So what if the overall loss is a few billion? That was already off the credit sheets when they spent $12B initially and now Google's profits are inflated by whatever loss MM isn't making for them.

 

Yes they paid for it but it was on their balance sheet as an Asset last Quarter.

Now it will get moved to a LOSS.  It will smash their CURRENT EARNINGS not PAST EARNINGS.

You are talking purely in cash flow terms.

post #208 of 235
Quote:
Originally Posted by marubeni View Post

Why don't you read a book about how companies are valued? Google has much faster growth than Apple.

But how many years will it take the to reach the same levels if income and profit as Apple. Apples profit is almost as much as Googles revenue. They will probably never be able to increase their advertising revenue to that of Apple. Also countries around the work are getting sick of Googles disregard for privacy. It will not be long before governments will introduce legislation to prevent Googles spying. Examples are Germany making Google get rid of street view and the EU looking at Google fixing search results. Also Google will never get access to China's market. Google has a mountain of problems piling up that they will need to face in the near future.
Edited by Crosslad - 1/30/14 at 1:10pm
post #209 of 235
Quote:
Originally Posted by sog35 View Post
 

 

Yes they paid for it but it was on their balance sheet as an Asset last Quarter.

Now it will get moved to a LOSS.  It will smash their CURRENT EARNINGS not PAST EARNINGS.

You are talking purely in cash flow terms.

 

No, it won't.  We will see in a couple of hours...

post #210 of 235
Quote:
Originally Posted by marubeni View Post
 

 

Why don't you read a book about how companies are valued? Google has much faster growth than Apple.

 

Thats part of it.  The other part is called the great rotation.  Wall Street loves to rotate in and out of stocks for no reason.

 

Google price on 1/1/2010 - $620

Google price on 7/1/2012 - $585

 

For over 2.5 years Google was stuck at $600.  Are they a much different company now as in 2010- mid 2012?  I don't think so.

Coincidence that Apple began going down the same time Google went up.

Like i said the Great Rotation.

post #211 of 235
Quote:
Originally Posted by sog35 View Post
 

 

Yes they paid for it but it was on their balance sheet as an Asset last Quarter.

Now it will get moved to a LOSS.  It will smash their CURRENT EARNINGS not PAST EARNINGS.

You are talking purely in cash flow terms.

 

Even if that was the case, why would it matter? They're better off cash wise than they were, they're better off profit wise than they were. They are also more likely to be able to grow in future without a big MM shaped anchor

post #212 of 235
Quote:
Originally Posted by ItsTheInternet View Post
 

 

Even if that was the case, why would it matter? They're better off cash wise than they were, they're better off profit wise than they were. They are also more likely to be able to grow in future without a big MM shaped anchor

 

It was the right decision to make to sell Motorolla.

 

But it was an AMAZING BAD decision to buy them in the first place.

post #213 of 235
Quote:
Originally Posted by marubeni View Post
 

 

No, it won't.  We will see in a couple of hours...

 

It will eventually be a loss.  probably once the deal is finalized.

 

Motorolla is now on the books as an asset (Goodwill). Once it is sold you need to remove the asset from the books and recognize a LOSS. 

post #214 of 235
Quote:
Originally Posted by sog35 View Post
 

 

It was the right decision to make to sell Motorolla.

 

But it was an AMAZING BAD decision to buy them in the first place.

 

Perhaps. I'm glad they managed to make the Moto X and G though. Couple of friends of mine have bought the G as it's barely $200 and while it's not an iPhone 5S, it's certainly competitive in everything that matters. Lets just hope they continue to make quality products because this sort of competition is good for everyone.

post #215 of 235
Quote:
Originally Posted by marubeni View Post

No, it won't.  We will see in a couple of hours...
http://investor.google.com/earnings/2013/Q4_google_earnings.html
Google's standalone revenue was up 22% year on year, at $15.7 billion. . .
Google Inc. announced today that its Board of Directors has approved a distribution of shares of the Class C capital stock as a dividend to our stockholders with a dividend record date of March 27, 2014 and a dividend payment date of April 2, 2014.

Q4 Financial Summary

Google Inc. reported consolidated revenues of $16.86 billion for the quarter ended December 31, 2013, an increase of 17% compared to the fourth quarter of 2012. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the fourth quarter of 2013, TAC totaled $3.31 billion, or 24% of advertising revenues.

etc.
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post #216 of 235
Quote:
Originally Posted by Gatorguy View Post


http://investor.google.com/earnings/2013/Q4_google_earnings.html
Google's standalone revenue was up 22% year on year, at $15.7 billion. . .
Google Inc. announced today that its Board of Directors has approved a distribution of shares of the Class C capital stock as a dividend to our stockholders with a dividend record date of March 27, 2014 and a dividend payment date of April 2, 2014.

Q4 Financial Summary

Google Inc. reported consolidated revenues of $16.86 billion for the quarter ended December 31, 2013, an increase of 17% compared to the fourth quarter of 2012. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the fourth quarter of 2013, TAC totaled $3.31 billion, or 24% of advertising revenues.

etc.

 

wont show up until deal is finalized

post #217 of 235
Quote:
Originally Posted by ItsTheInternet View Post
 

 

Perhaps. I'm glad they managed to make the Moto X and G though. Couple of friends of mine have bought the G as it's barely $200 and while it's not an iPhone 5S, it's certainly competitive in everything that matters. Lets just hope they continue to make quality products because this sort of competition is good for everyone.

 

You can kiss the $200 Moto G price goodbye.

They no longer have Google to subsidize the price for them.

No way Levono will loss money on every Moto G they sell.

post #218 of 235
Quote:
Originally Posted by sog35 View Post

wont show up until deal is finalized

Wouldn't that be the normal thing to happen? No deal is final until everyone, including the appropriate Government agencies, sign off on it. I suspect it may be the end of the year before it's official and thus hits the books.
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post #219 of 235
Quote:
Originally Posted by sog35 View Post

You can kiss the $200 Moto G price goodbye.
They no longer have Google to subsidize the price for them.
No way Levono will loss money on every Moto G they sell.

You don't know they're losing money at $200. There's other companies playing in that same range. In the meantime tho the Moto G is really a great bargain.
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post #220 of 235
Quote:
Originally Posted by Gatorguy View Post


You don't know they're losing money at $200. There's other companies playing in that same range. In the meantime tho the Moto G is really a great bargain.

 

like i said it won't be anymore.

 

Google/Moto were selling those units at a loss, just like the Nexus line.

post #221 of 235
Quote:
Originally Posted by sog35 View Post
 

 

like i said it won't be anymore.

 

Google/Moto were selling those units at a loss, just like the Nexus line.

 

I think that seems pretty unlikely really. We know Apple's margins would allow for a nearly cost sale at similar numbers. I doubt Apple's manufacturing efficiency pushes that too far either way.

post #222 of 235

Google goofed Big Time in buying MMI, because overnight it made Google a manufacturer of devices that infringed Apple patents. With Google a standalone software provider, without the manufacturing component, the best Apple might do now is (somehow) implicate Google as a facilitator/accomplice/conspirator to patent infringement by the companies that do still make devices running Android (for as long as that lasts). I don't know that anyone or any company has ever been found guilty of that in a legally punitive sense, though. The MMI acquisition also put Google in direct competition with other manufacturers, eliciting cries of favoritism (boo-hoo).

 

In any case, there are far too many Google apologists (and investors) to let the original purchase of MMI be viewed as a Google screw up.

post #223 of 235
Quote:
Originally Posted by sog35 View Post

like i said it won't be anymore.

Google/Moto were selling those units at a loss, just like the Nexus line.

Sog, Google will still own MM until they don't. That won't happen for several months, and that assumes Lenovo gets the regulatory OK.
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post #224 of 235
Quote:
Originally Posted by Maestro64 View Post

I knew this was coming, my prediction was they would shut it down in 2 to 3 yrs when the purchase, I figure by some time in 2014 they would be out of the cell phone business, I figure they would just shut it down since I could not see anyone stupid enough to buy what was left. 

Thanks Icahl for officially killing what was once know as Motorola. 

I will give Lenovo credit for doing a good job with the IBM think pad and taking it forward, however they have something good to work with, I do not believe that to be the case here.

Think about this, Google license all the Moto IP to Samsung and then turns around and sell the business to one of the company eating Samsung lunch on the low end and license all the same IP to Lenovo as well.

Spot on. I would love to see the licensing details. What will Scamscum do when they feel undermined? Wll be interesting to see. Poor ol google can't do a straight up deal, everything is double spy handicapped because they ar a*holes.

Ahh, Apple's problem is they are a straight shooter. Get punished for that 'nievete' until... The market crashes and there is a flight to quality. Bank of Apple, Yeah!
What is really factored into the price is a kind of perpetual sense of disbelief that any company could be as good as Apple is. ~Retrogusto
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What is really factored into the price is a kind of perpetual sense of disbelief that any company could be as good as Apple is. ~Retrogusto
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post #225 of 235

This is all pretty entertaining. Five days. APPL -10%, GOOG +1%

 

<your-favorite-spit-take.gif>

 

(I own some of both)

post #226 of 235
Quote:
Originally Posted by waterrockets View Post
 

This is all pretty entertaining. Five days. APPL -10%, GOOG +1%

 

<your-favorite-spit-take.gif>

 

(I own some of both)

 

last 5 years:

 

Google up 275%

Apple up 550%

post #227 of 235
Quote:
Originally Posted by sog35 View Post
 

 

last 5 years:

 

Google up 275%

Apple up 550%

 

That's another funny thing. They're both pretty amazing for their investors.

post #228 of 235

Google reminds me of the movie "Pretty Woman".  Larry Page is Richard Gere.  Google bought Motorola without any ability of reviving Motorola.  Motorola was played around by Google as a business toy. 


Edited by tzeshan - 1/31/14 at 9:12am
post #229 of 235
Quote:
Originally Posted by christopher126 View Post
 

Very well said, mdriftmeyer.

 

You could have a lucrative career writing Corporate Mission Statements! :)

 

I still maintain, one of SJ's greatest contributions to tech was corralling SW/HW engineers and forcing them to produce user friendly products.

 

One only has to walk around Best Buy (depressing in-of-itself) to see all the blue, grey, black plasticky horrible products most other companies are producing. 

 

P.S. Just finished the new book Dogfight about Google and Apple. Very quick read. First half was better than the second half, but still very interesting. One thing that stuck out for me was, Google's approach to releasing SW. Which was, put it out 75%-80% complete and then let customer feedback (read: customer complaints and frustrations) drive which areas of the SW needed improvements first. MS had the same approach with their OS releases.

 

Best.

 

I'm certainly not opposed to working with people in need of having the written word well crafted. If you know anyone, just send me a line at my permanent address.

 

Best back.

post #230 of 235
Quote:
Originally Posted by AppleSince86 View Post

This is perhaps the most dramatic evidence to date that Google acts based upon impulse rather than thought-out strategy. Taking actions without significant thought to costs or future consequences is the hallmark of kids.

Bingo. The point about this whole story isn't so much about how much Google may have lost on their Motorola acquisition, but about how it reveals a fundamental flaw in their long-term strategic planning and vision.

Google reacts. Apple acts. The latter is better.
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post #231 of 235
Quote:
Originally Posted by Benjamin Frost View Post

Bingo. The point about this whole story isn't so much about how much Google may have lost on their Motorola acquisition, but about how it reveals a fundamental flaw in their long-term strategic planning and vision.

Google reacts. Apple acts. The latter is better.

I've actually been reading and listening to a lot of great talks regarding Google, and while I still have huge privacy concerns, I think that Google is being run like a research lab. Sergey and Larry at heart were always researchers. Google search started out as a research project. Looking at it from that perspective, I think Google and Apple are fundamentally different. Apple is a product company that is hyper focused and Google is a research company that is willing to try anything. Researchers spend money like crazy in the name of coming of with the craziest things. Most research companies or research universities get government or private funding. Google on the other hand gets in funding through adverstising. In the end though, I think Google is a bunch of nerds trying anything and everything, because their founders want them to do that. That's why I think Android even exists. It is just one way to connect a lot of their projects, with their control over it. I like Apple more, and as corporations are concerned, I trust Apple more than Google. With that being said, I can now look at Google with a different set of expectations. I've met a lot of researchers in my life, and sometimes they have a hard time realizing what sort of impact their work will have. They just want to keep on doing what they are doing because they think it is crazy enough.
post #232 of 235
Quote:
Originally Posted by foad View Post

I've actually been reading and listening to a lot of great talks regarding Google, and while I still have huge privacy concerns, I think that Google is being run like a research lab. Sergey and Larry at heart were always researchers. Google search started out as a research project. Looking at it from that perspective, I think Google and Apple are fundamentally different. Apple is a product company that is hyper focused and Google is a research company that is willing to try anything. Researchers spend money like crazy in the name of coming of with the craziest things. Most research companies or research universities get government or private funding. Google on the other hand gets in funding through adverstising. In the end though, I think Google is a bunch of nerds trying anything and everything, because their founders want them to do that. That's why I think Android even exists. It is just one way to connect a lot of their projects, with their control over it. I like Apple more, and as corporations are concerned, I trust Apple more than Google. With that being said, I can now look at Google with a different set of expectations. I've met a lot of researchers in my life, and sometimes they have a hard time realizing what sort of impact their work will have. They just want to keep on doing what they are doing because they think it is crazy enough.

I like your analysis, foad. However, I'm not so sure that Google and Apple are all that different in terms of strength in research. Google seems like a much more research-oriented company because it wears it on the outside, whereas Apple hides it all. Google struck lucky with their search algorithms and used them as a basis for their ad revenue. This revenue enables them to fund all kinds of ambitious projects.

But when I look at Google Glass, I don't see the next iPhone but a company that can't see the wood for the trees.
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post #233 of 235
Quote:
Originally Posted by Benjamin Frost View Post


I like your analysis, foad. However, I'm not so sure that Google and Apple are all that different in terms of strength in research. Google seems like a much more research-oriented company because it wears it on the outside, whereas Apple hides it all. Google struck lucky with their search algorithms and used them as a basis for their ad revenue. This revenue enables them to fund all kinds of ambitious projects.

But when I look at Google Glass, I don't see the next iPhone but a company that can't see the wood for the trees.

 

I don't think Apple lacks research strength. I just think that their focus in how they apply their research is different. I like to think of it like how I'm a huge lover of technology, and love reading about out there research (robotics, AI, etc.), but to my mom, she wants to know how something will improve her life. Touch ID had an appreciable impact on her use of her iPhone. Apple focuses their research on improving the lives of their users and society as a whole. Google researches in a way that sometimes is disconnected with the needs of the general public because they seem to be purely trying to come up with crazy stuff. They are just different approaches. That is to your point about Google Glass. Nerds think it is cool, but don't always look at its social implications, which I think are pretty bad and intrusive. don't have to use Google's products to appreciate that they can come up with crazy technology. A lot of research is like that...in a bubble.

 

[edited for clarity]

post #234 of 235
Quote:
Originally Posted by Benjamin Frost View Post

I like your analysis, foad. However, I'm not so sure that Google and Apple are all that different in terms of strength in research. Google seems like a much more research-oriented company because it wears it on the outside, whereas Apple hides it all. Google struck lucky with their search algorithms and used them as a basis for their ad revenue. This revenue enables them to fund all kinds of ambitious projects.

But when I look at Google Glass, I don't see the next iPhone but a company that can't see the wood for the trees.

It will be a long time before you see anyone with "the next iPhone", Apple included. That was a product launched in a perfect storm. Apple's iPad hasn't had nearly the same impact, and I can't imagine any of the remored products from anyone contributing anywhere near as much revenue. That doesn't mean these other products aren't worth pursuing and can't be financially successful, perhaps even hugely so.
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post #235 of 235
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Originally Posted by Gatorguy View Post


It will be a long time before you see anyone with "the next iPhone", Apple included. That was a product launched in a perfect storm. Apple's iPad hasn't had nearly the same impact, and I can't imagine any of the remored products from anyone contributing anywhere near as much revenue. That doesn't mean these other products aren't worth pursuing and can't be financially successful, perhaps even hugely so.

 

I agree that the launch of the iPhone was at the right time and that is a rare thing to happen. I also remember that there were a lot of people that had a very similar sentiment of it not being able to have any impact on the industry.  I have a feeling that the rumors of what Apple is going to release is probably short of what they will probably release. People (not saying you) had a dismissive attitude before and immediately after the launch of the iPhone. Now years later, the industry has completely changed because of the iPhone.

 

I think Apple is even more conscious than us of the fact that they don't want to depend on the iPhone as much as they do now. With the release of the iPhone 5c, it shows Apple repeating the iPod pattern and expanding the portfolio. Sure, the 5c was a misstep, but there were missteps even when Steve was around.

 

I do disagree with you a little regarding the iPad. While the iPad isn't selling in the volumes or revenue as the iPhone, it has had a dramatic impact on the PC market. It has even had a massive impact on Apple. I think the full impact and potential of the iPad is yet to be completely realized, but I think the iPad is what Steve Jobs envisioned when he released the first Mac.

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