Lenovo chimes in on deal to buy Motorola

[Jeff Causey]

​

Yesterday Android fans around the world were stunned by news that Google had agreed to sell Motorola to Lenovo in a deal valued at $2.91 Billion dollars. Many have been wondering why Google would agree to such a move after only a couple years of ownership and signs that Motorola was gaining in popularity. On the flip side, the question is out there regarding what Lenovo hopes to gain from the deal. In a new interview with the Wall Street Journal, Lenovo CEO Yang Yuanqing and CFO Wong Wai Ming shared some of the thought process and what Lenovo has planned for the future with Motorola.

According to Yang, the Motorola acquisition is a way to get a shortcut into the U.S. smartphone market along with other mature markets. Lenovo is already a major player in the Chinese market and has been growing in other Asian emerging markets. That market presence is significant and enabled Lenovo to reach the rank of fourth largest smartphone manufacturer in the world based on shipments, trailing Samsung, Apple and Huawei. Nevertheless, Lenovo has no presence in the U.S. and challenging the existing players would definitely be an uphill struggle. Motorola on the other hand already has a strong brand presence in the U.S. and in Latin American countries as well as strong ties to major U.S. mobile carriers.

Yang does anticipate the company will retain the Motorola brand, possibly with some minor tweaks. He compared the situation to the company’s purchase of the IBM PC business and how they kept the ThinkPad branding.

One revelation that Yang shared is that Lenovo does not really have a plan yet on how to make Motorola profitable. While he is confident Lenovo can turn the business around, exactly how that will happen remains to be seen. He also indicated that he believes they will be able to sell more than 100 million smartphones worldwide in the year following the close of the deal. It is a little unclear whether that target is just for the Motorola unit or includes Lenovo units.

Finally, Wong indicates that they do not expect regulatory issues as a foreign company trying to operate in the U.S. He points out that Lenovo already has a track record from the IBM PC business deal and more recently they bought a U.S. software company, Stoneware. Yang also points out that the smartphone business is targeted at a consumer product market and not something like network infrastructure.

Do you think Lenovo will be able to get Motorola on track financially and eventually challenge Samsung and Apple in the U.S. market?

source: Wall Street Journal


Come comment on this article: Lenovo chimes in on deal to buy Motorola

Visit TalkAndroid for Android news, Android guides, and much more!​

News via TalkAndroid