If Lenovo can turn around Motorola like they did IBM's personal computer/laptop business, they are going to become a big player in the US market. Samsung better watch out.
Lenovo never really "turned around" IBM's PC business. IBM's PC business was doing fine when Lenovo bought it.
The problem for IBM was that it had completed its transition to becoming a service company, with significantly higher profit margins. The PC business was dragging their profit margins down, and unlike their server business (at the time) it didn't help much in gaining consulting clients. Primarily because PCs were complete commodities by that point.
IBM did exactly the same thing a few months ago with their x86 server business (also sold to Lenovo). While this was still profitable, it was also becoming commodified which dragged margins down, and was no longer helping gain services and consulting clients. Note that they did not sell the server hardware businesses which are unique to them (Power, etc) which help them gain significant consulting and services contracts in niches where those lines make the most sense.
Lenovo - "Playing a significant role in the company's success is its relatively low-cost offerings."
Another company run by geniuses racing to the bottom. And a 10 billion dollar loss for the big G - couldn't have happened to nicer bunch of evil doers.
It's a good move for both companies. Google can focus on patents and software, Lenovo can make inexpensive hardware. Of the companies I've dealt with in my retail gig, Lenovo is definitely one of the less objectionable, even if I have to explain who they are (8 years later and I'd say 6-8 times a week I still need to tell people who Lenovo are...).
It is good for Apple in that a company who works very hard to keep low margins is going to be taking over a competitor - they will not put the investment in that Google would have.
Feel bad for those people in Texas building the Moto X - they're not long for their jobs.
Which re-enforces my point of them being Wall Scum, they are playing favourites with Google! If what you say is true that Motorola was running at a loss for Google, than their loses are greater than $9 billion! So with that much red ink on the balance sheet, no matter how they try to spin it later on their next quarterly, this is still a HUGE loss that demonstrates a tremendous mistake by Google's senior management, and yet they are being rewarded for their stupidity!
And with a name like mistercow, I must be talking to a Google brown noser...
Wall Street isn't a collective or of a singular mindset. Google shed a money loser and thus should make decent profits from now on. People are jumping in on a seemingly turn around.
I've seen how well you've done in other areas on this forum.
I'll wait until someone from Bloomberg, WSJ, Fortune, NYT or some other actually knowledgeable person says otherwise. Then look at all the fun you'll have quoting from the publication.
I also used to wait around for 3 or 4 people with journalism degrees to tell me how to think between ads from their sponsors,
but then high school/college/real-world/brain happened.
Sponges are great for absorbing, but not so great at critical thinking.
Those numbers are missing a lot of extraneous costs one can assume they are just magically moving under Google accounting's other R&D funds.
The other thing not accounted for is the fact that Google probably held on to some things. Probably patents for the most part, but there could be other contracts/licenses that are not being sold to Lenovo. Not suggesting what Google kept is worth 9 billion and they definitely lost money on this deal, but I do not think the Motorola being sold to Lenovo is the the Motorola Google bought.
Total loss is $5,400,000,000. Google only made $10B in fiscal year 2012. So the loss basically wiped out half of year of profits.
Now try to spin that as being 'a small loss'.
Well, starting with your $5,400,000,000 number, you left out that the purchase price included operating losses that Motorola had already incurred as Motorola... This was money spent by Motorola, not Google, that Google got to write off after the acquisition. $1,000,000,000 domestically and $700,000,000 internationally. So another $1.7bil lopped off.... down to $3.7billion- and there were additional breaks that were expected to continue on to the tune of $700million/yr until 2019 according to Forbes... so when you factor that in the losses (if any) get pretty small pretty quick, especially since they still hold the patents they deem useful to themselves.
I don't think Moto Mobile was a 'win' for Google by any stretch, but the exuberant schadenfreude most of the avid Google haters really isn't all that warranted.
To me I'm just a little sad that the inventor of the mobile phone and the only smartphone designed and made in the US is gone =(
All those patent disputes that Motorola brought against Apple (and others) in Europe didn't work out (I assume Google bought Motorola for their patents).
And yet Lenovo has a more expansive (phone) product portolio than Motorola.
Something doesn't add up about this deal...
Sure it does from their point of view - they are a Chinese company buying Western market expertise and business relationships in the mobile industry in markets where they don't currently compete for the purpose of market expansion. The problem is that motorola's market and brand has eroded so significantly that it is debatable how much they can possibly benefit.
This tied with the fact that Samsung and Google just entered a 10 year cross licensing deal, it looks as though Google will handle more of the software and Samsung will do the hardware. The writing has been on the wall for some time that both Samsung's and Google's mobile future is tied together. Samsung's own mobile OS won't ever get the kind penetration that Android has and Motorola wasn't looking like it would ever catch up to Samsung. With Nokia now becoming a part of Microsoft, the lines in the sand seem to be drawn.
It does look like Google sold Moto to appease Samsung.
Comments
If Lenovo can turn around Motorola like they did IBM's personal computer/laptop business, they are going to become a big player in the US market. Samsung better watch out.
Lenovo never really "turned around" IBM's PC business. IBM's PC business was doing fine when Lenovo bought it.
The problem for IBM was that it had completed its transition to becoming a service company, with significantly higher profit margins. The PC business was dragging their profit margins down, and unlike their server business (at the time) it didn't help much in gaining consulting clients. Primarily because PCs were complete commodities by that point.
IBM did exactly the same thing a few months ago with their x86 server business (also sold to Lenovo). While this was still profitable, it was also becoming commodified which dragged margins down, and was no longer helping gain services and consulting clients. Note that they did not sell the server hardware businesses which are unique to them (Power, etc) which help them gain significant consulting and services contracts in niches where those lines make the most sense.
you are totally in denial. I remember you said the Motorolla deal was not a bad thing months ago.
Now you are just covering your ass.
Hahahahaha... coming from you I'll take all of that as a compliment.
According to the HN thread it's more like this:
Total: $2.17 Billion Loss
Those numbers are missing a lot of extraneous costs one can assume they are just magically moving under Google accounting's other R&D funds.
Another company run by geniuses racing to the bottom. And a 10 billion dollar loss for the big G - couldn't have happened to nicer bunch of evil doers.
I prefer the Woodstock thermostat.
It's a good move for both companies. Google can focus on patents and software, Lenovo can make inexpensive hardware. Of the companies I've dealt with in my retail gig, Lenovo is definitely one of the less objectionable, even if I have to explain who they are (8 years later and I'd say 6-8 times a week I still need to tell people who Lenovo are...).
It is good for Apple in that a company who works very hard to keep low margins is going to be taking over a competitor - they will not put the investment in that Google would have.
Feel bad for those people in Texas building the Moto X - they're not long for their jobs.
Wall Street isn't a collective or of a singular mindset. Google shed a money loser and thus should make decent profits from now on. People are jumping in on a seemingly turn around.
Those numbers are missing a lot of extraneous costs one can assume they are just magically moving under Google accounting's other R&D funds.
Do you have a relevant example? I'm just going off what was mentioned in another thread.
[IMG]http://forums.appleinsider.com/content/type/61/id/37907/width/200/height/400[/IMG]
1. Lose billions money year-over-year? Stock goes up
2. Sell off money-losing business at a substantial billion dollar loss? Stock goes up
3. Profit
Why, I didn't know that.
Thank you for your opinion.
You are most welcome!
Run along now.
To say its only a 1 or 2 billion loss is absolute nonsense, and phony accounting.
I've seen how well you've done in other areas on this forum.
I'll wait until someone from Bloomberg, WSJ, Fortune, NYT or some other actually knowledgeable person says otherwise. Then look at all the fun you'll have quoting from the publication.
I also used to wait around for 3 or 4 people with journalism degrees to tell me how to think between ads from their sponsors,
but then high school/college/real-world/brain happened.
Sponges are great for absorbing, but not so great at critical thinking.
I just checked and the stock is down 16. 09
Those numbers are missing a lot of extraneous costs one can assume they are just magically moving under Google accounting's other R&D funds.
The other thing not accounted for is the fact that Google probably held on to some things. Probably patents for the most part, but there could be other contracts/licenses that are not being sold to Lenovo. Not suggesting what Google kept is worth 9 billion and they definitely lost money on this deal, but I do not think the Motorola being sold to Lenovo is the the Motorola Google bought.
Total loss is $5,400,000,000. Google only made $10B in fiscal year 2012. So the loss basically wiped out half of year of profits.
Now try to spin that as being 'a small loss'.
Well, starting with your $5,400,000,000 number, you left out that the purchase price included operating losses that Motorola had already incurred as Motorola... This was money spent by Motorola, not Google, that Google got to write off after the acquisition. $1,000,000,000 domestically and $700,000,000 internationally. So another $1.7bil lopped off.... down to $3.7billion- and there were additional breaks that were expected to continue on to the tune of $700million/yr until 2019 according to Forbes... so when you factor that in the losses (if any) get pretty small pretty quick, especially since they still hold the patents they deem useful to themselves.
I don't think Moto Mobile was a 'win' for Google by any stretch, but the exuberant schadenfreude most of the avid Google haters really isn't all that warranted.
To me I'm just a little sad that the inventor of the mobile phone and the only smartphone designed and made in the US is gone =(
Sure it does from their point of view - they are a Chinese company buying Western market expertise and business relationships in the mobile industry in markets where they don't currently compete for the purpose of market expansion. The problem is that motorola's market and brand has eroded so significantly that it is debatable how much they can possibly benefit.
I just checked and the stock is down 16. 09
That was at the close. It is up over 28 in after hours trading
This tied with the fact that Samsung and Google just entered a 10 year cross licensing deal, it looks as though Google will handle more of the software and Samsung will do the hardware. The writing has been on the wall for some time that both Samsung's and Google's mobile future is tied together. Samsung's own mobile OS won't ever get the kind penetration that Android has and Motorola wasn't looking like it would ever catch up to Samsung. With Nokia now becoming a part of Microsoft, the lines in the sand seem to be drawn.
It does look like Google sold Moto to appease Samsung.
I also used to wait around for 3 or 4 people with journalism degrees to tell me how to think between ads from their sponsors,
but then high school/college/real-world/brain happened.
Sponges are great for absorbing, but not so great at critical thinking.
Great... I've got another groupie.