Business
5:16 pm
Wed January 29, 2014

Lenovo Buys Motorola, But Plans To Continue Making Moto X Smartphone In Fort Worth

Google is selling Motorola Mobility's smartphone business to Lenovo Group for $2.9 billion.

Motorola has produced the Moto X smartphone in Fort Worth -- the first smartphone made in the U.S. Lenovo says it will continue the Fort Worth operation. Lenovo officials tell KERA that "there are now no plans to change Motorola’s approach to manufacturing."

A spokesman for the city of Fort Worth told KERA he wasn’t aware of any changes for the Moto X production. The phones are made at an Alliance plant.

[More from KERA News: Motorola Chooses Fort Worth For New U.S.-Made Phone]

The deal announced Wednesday will rid Google Inc. of a financial headache that has plagued the company since buying Motorola Mobility for $12.4 billion in 2012. Motorola has lost nearly $2 billion since Google took over in May 2012 while trimming its workforce from 20,000 to 3,800.
 
Google is retaining most of Motorola's portfolio of mobile patents, providing the company with legal protection for its widely used Android software for smartphones and tablet computers. Gaining control of Motorola's patents was the main reason Google CEO Larry Page decided to make the most expensive acquisition in the Internet company's 15-year history.

China's Lenovo Group is picking up about 2,000 Motorola patents in addition to the phone manufacturing operations.

Lenovo says it is "highly committed to the U.S. market and Motorola Mobility’s U.S. presence."

"Lenovo has a strong record of investing in U.S. hardware companies, and creating growth," Lenovo officials said.

Lenovo executives say they aren't planning to lay off any more Motorola employees and that the subsidiary would remain based in its current headquarters in Libertyville, Ill.

Motorola released two new smartphones last year, the Moto X and Moto G. The phones attracted lots of headlines, but didn't sell as well as anticipated, analysts say.

The Wall Street Journal reported earlier this month:

Google Inc.'s Motorola Mobility unit dropped the price on its flagship smartphone Wednesday, continuing its assault on the high margins of its smartphone rivals.

In a blog post, the company said its Moto X with 16 gigabytes of memory would now cost $399 without a wireless contract for U.S. customers, down from $550. The company offered the Moto X for brief periods in December at $349, but the latest price drop isn't a temporary promotion.

KERA's Lauren Silverman got a tour of the Fort Worth Moto X factory last year.