Lenovo is acquiring the Motorola Mobility smartphone business for $2.91 billion. The deal includes a portfolio of smartphones like the Moto X and Moto G and the DROID Ultra series. Lenovo will take ownership of the future Motorola Mobility product roadmap.
With a strong PC business and a fast-growing smartphone business, Lenovo expects the deal to strengthen its position in the handset market. With Moto, Lenovo automatically gains a strong market presence in North America and Latin America, as well as a foothold in Western Europe, to complement its business in emerging markets around the world.
“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem,” said Larry Page, CEO, Google. “This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.”
Google Keeps the Patents
Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Lenovo will also receive more than 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio.
“The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones,” said Yang Yuanqing, chairman and CEO of Lenovo. “We will immediately have the opportunity to become a strong global player in the fast-growing mobile space.”
Will the Bet Pay Off?
Lenovo has made big bets in the past, acquiring IBM’s PC business and its legendary PC brand in 2005. Will this pay off as well as the PC buy?
We caught up with Jeff Kagan, an independent technology analyst, to get his take on the blockbuster-musical chairs deal. He told us Lenovo seems to be on a sudden fast track to growth on the smartphone side of the fence. First, the company rolled out its own smartphone and now it’s taking a massive plunge into the wireless market with the Motorola acquisition.
“Motorola is a big acquisition for Lenovo and it comes shortly after it agreed to buy IBM’s low-end server business. Lenovo looks like it is putting the building blocks together to make an intensive push into new markets including smartphones,” Kagan said.
“The U.S. market is already very competitive and is led by both Apple iPhone and Google Android like the Samsung Galaxy. Other companies like Motorola and Nokia have been trying to carve out a niche, but have only seen limited success so far," he said. "So what makes Lenovo think that Motorola will be it’s golden goose?”
A Lenovo Version of Apple?
As Kagan sees it, the Motorola brand may be older and tired but it does have one of the strongest and most respected names in the business. If Lenovo can freshen up the Motorola brand -- and merge the ideas and thinking it currently use in its smartphones with Motorola -- Kagan said the company could create a very strong new competitor.
“Lenovo’s plans sound familiar. They want to recreate what Apple already created. This sounds like Apple, with iPhones and iPads and computers. However, this will be a Lenovo version of Apple,” Kagan said.
“If they can indeed pull all the parts together, have them work well together, and capture market share, then Lenovo could indeed quickly become a competitor in the number three spot currently held by Microsoft-Nokia. We’ll just have to wait and see.”