Motorola Inc. purchased the research-and-development operations and patent portfolio of European mobile-phone startup Sendo. Terms of the deal were not disclosed.
The announcement ends weeks of speculation on the fate of Sendo, which has been nearing corporate collapse. Indeed, Sendo today essentially entered bankruptcy protection from its creditors; it is now under the management of two administrators, who will oversee the company’s remaining affairs, businesses and assets.
“Motorola is thrilled to welcome the Sendo research and development team and their proven expertise in designing solutions for wireless operators,” said Ron Garriques, president of Motorola’s mobile-phone business. “With Motorola, this team will have a chance to flourish and help transform the way people experience mobile communications. Motorola has had tremendous success in Europe over the last 18 months-particularly because of our commitment to helping customers deliver value-added services. We’re going to keep up the momentum, and this team will be a vital part of that.”
Motorola is acquiring 200 Sendo engineers, 170 in the company’s headquarters of Birmingham, United Kingdom, and the rest in Singapore. Motorola said it will integrate the engineers into its Mobile Devices business and will continue the team’s “focus on designing solutions that enable wireless operators to deliver value-added services to consumers.” Motorola also scores Sendo’s design and test equipment and its intellectual property portfolio, including 50 existing and 40 pending patents.
Motorola’s acquisition of Sendo indicates the world’s No. 2 mobile-phone player intends to further its efforts to please wireless carriers. Players like Samsung Electronics Co. Ltd., LG Electronics Co. Ltd. and Sendo have made names for themselves by designing phones to operators’ specifications. Motorola’s worldwide market share stood at about 16.9 percent in the first quarter, according to CIBC World Markets.
However, Motorola is not acquiring Sendo’s manufacturing and supply relationships, its capital and real estate assets, or its liabilities and financial obligations. This is likely a key stipulation, because Sendo earlier this year launched a legal battle against L.M. Ericsson and the European Telecommunications Standards Institute, alleging they are quashing competition with unfair royalty rates.
Sendo was founded in 2000 to design low-cost, customized mobile phones for wireless carriers. The company primarily sold phones in Europe and Latin America and briefly offered phones through smaller retailers in the United States. Sendo gained prominence several years ago by dropping Microsoft Corp.’s operating system for smart phones in favor of the Symbian platform. Sendo sold 5 million handsets last year and counted more than $420 million in revenues.
Sendo is not the first company to fall under the pressures of the hotly contested mobile-phone market. Siemens AG recently off-loaded its mobile-phone business to Taiwanese player BenQ, and Alcatel Corp. and Audiovox Communications Corp. have also exited the market.
