Lenovo’s £2.91 billion acquisition of Motorola from Google is certainly the talking point of the week. Hot on the heels from a meeting with Motorola employees about the purchase, Lenovo’s CEO Yuanqing Yang discussed the deal and the company’s plans to compete in the smartphone market with Fortune Magazine yesterday. The interview sheds some much needed light on the deal, as well as what Lenovo has planned for Motorola.
It turns out that Lenovo was interested in acquiring Motorola all the way back in 2011, when Motorola initially split into two companies. Yang and Eric Schmidt, Google’s executive chairman, even discussed the prospect of Lenovo taking over Motorola’s hardware business when Google acquired the company back in 2012, which turns out to be the basis for the recent deal. Just two months ago, Google reinitiated contact with Lenovo to ask if they were still interested in Motorola, and now here we are.
The interview also confirmed one of our suspicions about why Lenovo was so interested in Motorola – the brand and access to Western markets.
Lenovo is already a big name in China, and other emerging countries, but the company’s focus on lower end products has so far kept it out of the U.S and Latin American smartphone markets. Lenovo aims to leverage the Motorola brand to branch out into the mid and premium tier market segments, which means that we’re very likely to see Motorola stick around in the west, but Lenovo also may make use of the brand in other markets.
We will fully leverage the Motorola brand in the U.S. and Latin America, just like we leveraged the ThinkPad brand in the PC space. Motorola will be our smartphone product. Yuanqing Yang
Following its acquisition of Motorola, Lenovo is setting its sights high, with a lofty sales target of 100 million smartphones by 2015. Yang even stated that the company’s “mission is to surpass” both Samsung and Apple.
I wish we could sell more than 100 million smartphones together in the year 2015. Yuanqing Yang
Despite the seemingly bold talk, we must remember that Lenovo finished in the top five smartphone developers in 2013, regarding the number of devices shipped. Lenovo is a company with substantial clout, even though it may not be a western household name like Samsung or Apple.
Looking at the numbers, the 2015 100 million smartphone shipment target is fairly reasonable. Lenovo already almost doubled its handset shipments throughout 2013. The company was also the fastest growing manufacturer out of the top five, if this trend continues the company could be close to the 100 million target by the end of 2014. Not to mention that Motorola managed 10 million sales itself in 2013, and could act as Lenovo’s gateway to the much sought-after Western markets.
Of course challenging Apple and Samsung is another matter entirely. The two smartphone giants also saw decent growth figures in 2013, although Apple was by far the weakest of the top five. Catching them up is going to be a much more difficult and drawn out task.
Do you think that Lenovo and Motorola can challenge Apple’s and Samsung’s dominance, or has Lenovo spent $2.9 billion on a dead weight?