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Lenovo-Motorola out to overtake Apple, Samsung in smartphones

Publication Date : 03-02-2014

 

Lenovo, the world’s largest personal computer maker, is ready to beef up its smartphone business with the aim of selling more than 100 million units globally in two years as soon as the US approves its acquisition of Google’s Motorola Mobility.

Its goal is to gain hard on the heels of Samsung Electronics and Apple, the world’s top smartphone makers, following its US$2.9 billion acquisition, which marks the fourth-biggest by a Chinese company.

This has enabled the Chinese PC maker to further boost its technological leverage and diversify into mobile as it will be able to use more than 2,000 lucrative patents held by Motorola Mobility, analysts and industry sources said.

Lenovo chairman and CEO Yuanqing Yang said in an interview with the media that it would be able to achieve its sales target and compete alongside Samsung and Apple through the deal, as the Chinese PC maker has a strong foothold in China and emerging markets. Motorola Mobility, on the other hand, has a strong presence in North America and Latin America.

Currently, the global shares held by Lenovo and Motorola in the smartphone market may look minuscule, with Lenovo holding about 4 per cent market share while Motorola has little more than 1 per cent.

But when the two combine forces and use each other’s strengths, particularly in engineering and innovation, the Lenovo chairman said both sides would see a “complementary and perfect” synergy.

The partnership will enable the two companies to use their diverse marketing and distribution channels across the world to introduce “Motorola by Lenovo” smartphones, and take on and hopefully beat Samsung and Apple in the near future, the chairman added.

Samsung Electronics spokespeople were unavailable for comments on the partnership.

Samsung had dominated 2013 with more than a 30 per cent share in the global smartphone market, followed by Apple’s 15 per cent, according to data from research firm IDC.

Lenovo, the second-largest Chinese smartphone brand, had sought to boost its smartphone capability amid the rise of mobile and the fall of PCs. PCs account for about 80 per cent of its annual sales.

Lenovo turned to Google to seek acquisition of Motorola Mobility after its failed attempt to buy BlackBerry, which the Canadian government refused as the company was deemed important to its economy.

Lenovo and Google competed to buy Motorola Mobility and its long list of attractive patents in 2011. Google won the deal spearheaded by co-founder and CEO Larry Page as Apple increased its warfare against Google’s Android, which late-CEO Steve Jobs branded as a “rip-off” of Apple’s iOS.

Google decided to liquidate Mobility as its smartphone hardware was unable to bear fruit unlike its mobile operating system used mostly by its partners including Samsung, which also faces legal feud with Apple over designs and key functions of their smartphones.

Analysts had given a positive outlook for Lenovo in overseas markets even before its landmark purchase of Mobility.

“We see a good chance of Lenovo penetrating into other emerging countries with its smartphone product, such as Indonesia, India, Russia and Vietnam,” BNP Paribas said in a report last November.

 

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