China's Lenovo Buys Google's Smart Phone Business

China's fast-growing Lenovo Group technology business is buying the troubled smartphone manufacturing division owned by Google, the giant U.S. Internet company.

Lenovo, already the world's biggest personal computer maker, is paying $2.9 billion for Google's Motorola Mobility handset-making operation. But the search engine is retaining rights to almost all of the 17,000 patents connected to the phones.

Google kept the patent rights so it could continue to control technology licensed to phone makers who use Google's Android software, which powers the majority of the world's smartphones.

New Lenovo Vibe X smartphones displayed at IFA, one of the worlds largest trade fairs for electronics and electrical appliances, Berlin on Sept. 5, 2013. /AP New Lenovo Vibe X smartphones displayed at IFA, one of the world's largest trade fairs for electronics and electrical appliances, Berlin on Sept. 5, 2013. /AP

The deal is tentative pending approval from U.S. regulators. In recent years, the U.S. government has approved the sale of some American corporations to Chinese businesses, while blocking others, largely on grounds that the sales threatened U.S. security in various ways. Lenovo says it does not expect problems getting the deal approved.

The sales price marks a failed effort by Google to enter the competitive smartphone business. Google paid $12.5 billion for Motorola in mid-2012, although that deal came with $3 billion in cash and Google sold the company's television set-top box business for $2.3 billion.

The world's smartphone market is dominated by Korea's Samsung and U.S.-based Apple, with Lenovo third if the deal is completed.

Google's share while owning Motorola dropped from 2.3 percent to about 1 percent last year.

VOA News / Feb. 03, 2014 07:53 KST