Lenovo's acquisition of Motorola took everyone by surprise; however, the Chinese company had been planning this move since 2011. In an interview with Fortune magazine, Yuanqing Yang, the company's CEO, revealed many of the key aspects of the purchase and pointed to the future opportunities that this new reality opens up. Lenovo is aiming high: they intend to surpass Apple and Samsung in smartphone sales.
Only one day after the bomb in information technology of the year went off, one of the men who has participated the most in the deal met with this economic magazine to shed much light on the matter.
A long-awaited purchase
They had their eye on the American manufacturer since 2011. Google beat them to it in 2012, paying €12.500 billion, but that didn't stop them from holding talks with Eric Schmidt from the very beginning. These negotiations have finally come to fruition almost two years later, for a much lower price. The explanation lies in the fact that Google retains a significant portion of the patents, a highly valuable form of intellectual property.
Lenovo's goal with Motorola
Lenovo's goal is to replicate its PC market success in the mobile sector. Their strategy closely resembles their acquisition of IBM and its flagship ThinkPad product. This time, Motorola's Moto X is the game-changer.
The customization options on this phone are a feature consumers greatly appreciate. Being able to choose from up to 21 different colors and various details is fantastic. Unfortunately, the Motomaker feature remained exclusive to the Americas and wasn't available in Europe, despite its initial launch there.
Lenovo could extend that capability to Asia and emerging markets, not only for this model but also for future ones. The goal is to become a key player in the market and, why not, one day dethrone Apple and Samsung. Currently, the combined company makes Lenovo the world's third-largest smartphone manufacturer , with a 6% market share and nearly 60 million units sold in 2013. This makes Lenovo's dominance even more pronounced, given that they are also the world's leading computer manufacturer.
When executing this strategy, the brands will remain separated by regions. Motorola will keep its name in North America and Latin America, while Lenovo will stay in Asia. Although something could change in the short future.
Source: Fortune