Monday, February 3, 2014

Lenovo’s Game Changer: Partnering with Motorola


The PC maker Lenovo, gets a global brand of smartphones, Motorola.  
It’s confirmed that Google sold Motorola Mobility to the Chinese PC maker Lenovo, this past week.

Lenovo purchased Motorola for $2.91 billion, consisting of $660 million cash and $750 million in Lenovo shares.  This left a remaining $1.5 billion paid in the form of a three-year promissory note.

Lenovo picked up the Motorola brand, as well as its portfolio of devices, including both Moto X and Moto G.

Lenovo will receive more than 2,000 patent assets, while Google will still control the lion’s share of patents it originally obtained when it acquired Motorola several years ago.

This deal gives Lenovo a thriving market for smartphones in China and other countries.

“This is a big game changer for corporate customers who can now standardize on Lenovo from smartphones to PCs to servers,” said Ira Grossman, CTO of end-user and mobile computing at national solution provider MCPc, whose Anyplace Workspace is centered on providing anyplace, anytime, anywhere computing to corporations. “Lenovo is moving full throttle into the smartphone market. Lenovo wants to own the end point whether it’s smartphones, tablets, laptops, desktops and probably wearables too. Lenovo has it all now. They are building a compelling story with a multi-operating system, diverse form-factor strategy”.

This blockbuster deal came only a week after Lenovo agreed to quire IBM’s x86 server business for $2.3 billion.  The China-based computing giant followed up with the agreement and identified it into four different groups: enterprise servers, mobile, ThinkPad branded PCs and cloud services.

Entering the smartphone field for Lenovo is a bold move.  They will definitely have to “up their game” but it shouldn’t be hard considering their proven track record of successfully embracing innovative ideas.

A Troubled Business

The Motorola handset has always been a stress point between Google and its partners.  Google has said its maintained a division between its Android group and the Motorola unit.  Other vendors have also express their irritation with the partnership as a competitor.

In the last year, Motorola has suffered many losses.  Motorola acknowledged the operating system loss of $248 million, which was much more than the year prior.

The deal is still a surprise, seeing Google has been pushing to move more toward hardware with the Google Glass headset and its Chromecast media dongle.

Gaining A Brand

Lenovo may be jumping into the smartphone field with high ambitions, but the Motorola smartphone is largely limited to China.  Even though the market has ranked No. 5 among global smartphone vendors in the fourth quarter.

Lenovo’s CEO said in May 2013 that their new smartphones were to be brought into the US within a year, but there has been no update since.

Lenovo also bought out the PC business of IBM in 2005, a very similar move to the Motorola buy out from Google.

“Lenovo intends to keep Motorola’s distinct brand identity–just as they did when they acquired ThinkPad from IBM in 2005,” Google CEO Larry Page said in a statement.

There are reports Lenovo attempted to purchase BlackBerry, but the deal didn’t go through because of regulators sensitive to a Chinese company owning phones extensively used by the Chinese government.

Sometimes we think of China as inflexible and harsh, but Lenovo has been able to adapt in most brands and geographies.

The CEO of Motorola Mobility Dennis Woodside said he sees the deal as putting the mobility unit on a “rapid path to achieving our goal of reaching the next 100 million people with the mobile Internet.  With the recent launches of Moto X and Moto G, there is a tremendous amount of momentum running alongside Lenovo’s hardware expertise and global reach.

Do you think Lenovo made a smart move buying out Motorola?  Will Google regret selling Motorola to Lenovo?  Let us know your thoughts below!

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Partners: Lenovo’s $2.91 Billion Acquisition Of Motorola Mobility Is A Game Changer – CRN…

Google sells Motorola unit to Lenovo for $2.9B – C|Net$2.9b/

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