Lenovo Purchases Motorola Mobility
Lenovo Purchases Motorola Mobility: Smartphone Acquisition A Good Call For Driving Growth And Profit
Lenovo has just completed a USD 2.91 billion deal which will boost its chances of expanding growth and profits simultaneously. This deal will boost Lenovo’s presence in the Asian markets really well. Mobile marketing has caught on big time and every site worth its salt is now going mobile. The smartphone market is growing at a phenomenal rate. Purchasing the Motorola Mobility smartphone unit from Google Inc. will really boost its chances for success on a global scale as an international smartphone provider, say analysts.
The Chinese firm has expanded to become the third largest smartphone maker in India following its acquisition of Motorola Mobility from Google Inc. Motorola too will acquire a strategic fit. Lenovo has increased the global smartphone shipments by as much as 38% in the third quarter to around 16.9 million units making it the fourth largest smartphone maker in the world, according to IDC. Market share has currently expanded to 5.2% from 4.7% last year for this smartphone maker, says China Daily.
Officials from both Lenovo and Motorola announced the completion of the deal between the two firms as part of the partnership on Thursday, 30th October 2014. As part of the deal, Lenovo will operate Motorola Mobility as a completely owned subsidiary. The Chinese smartphone maker will also get access to the portfolio of smartphones and patent rights possessed by Motorola Mobility. The smartphone maker is currently headquartered in Beijing, China and is an MNC of repute. Its US office is located in North Carolina.
Google will attain outright complete ownership of the patent portfolio but Motorola and Lenovo will have access to around 2,000 patent assets as part of the deal. Chairman and CEO of Lenovo, Yan Yunaqing was quoted by China Daily as saying that the completed deal was a “historical milestone” for the two companies and he further said in the company release that "We will give the market something it has needed: choice, competition and a new spark of innovation.” Jeff Meredith, VP of marketing for Lenovo’s business group indicated that the brand value and equity of Motorola must be “reinvigorated” and an e-commerce focus is needed for future sales in China. Lenovo has also purchased IBM’s low end server unit recently for USD 2.1 billion. Lenovo is seeking to stave off competition from Apple, Samsung and the Chinese Apple, Xiaomi. Samsung is currently the largest smartphone vendor in the world.
"Motorola and Lenovo together would be No. 3 in the market (India) which would be the case in many markets that both brands operate,"spokespeople from both companies said during the course of a press conference. "Lenovo has a very good smartphone business in India through the offline channel. Motorola is present only on line. It's a good combination,"Liu Jun, Lenovo executive vice president and president of Lenovo's Mobile Business Group was quoted as saying by Business Standard. "Lenovo will continue with the same market plan in India, which is an important target market,"he also added.
Lava, Karbonn and Micromax are the home-bred handset makers in India which are currently ahead in the game, as per a Business Standard report while Samsung leas the nation with a 29% share. Both Lenovo and Motorola will remain separate entities following the deal.
