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Will Lenovo’s Motorola acquisition strengthen its multiscreen play?

Highlights
  • Lenovo will buy Google Inc's Motorola handset division for USD 2.91 billion
  • Larry Page says that Google would be best served by focusing on smartphone software rather than devices.
  • In the smartphone market, Lenovo ranks fifth; in PC shipments, it holds the first position; in the tablet space it has 14.3 per cent share.

In a big announcement in the digital space, Lenovo Group has agreed to buy Google Inc’s Motorola handset division for USD 2.91 billion, in what is China’s largest-ever tech deal. With this, Lenovo is touted to buy its way in a huge manner, into a heavily competitive handset market dominated by Apple Inc. Larry Page, CEO, Google said that Google would be best served by focusing on smartphone software rather than devices.

The deal ends Google’s short-lived foray into making consumer mobile devices and marks a pullback from its largest-ever acquisition. Google had paid USD 12.5 billion for Motorola in 2012. Under this deal the search giant will keep the majority of Motorola’s mobile patents, considered its prize assets. While, Lenovo will receive over 2,000 “patent assets” as part of the transaction, the companies said, but it remains unknown which will change hands and whether they might be subject to extra scrutiny from regulators.

Lenovo multiscreen play to get stronger?
Globally in the smartphone market, Lenovo ranked fifth in 2013 with a 4.5 per cent market share, according to IDC. That’s up from 3.3 per cent in 2012 and virtually nil a couple years before that. When it comes to PC shipments, Gartner reported that Lenovo held its lead over the Hewlett-Packard Co as the world’s biggest maker by shipments, with a market share of 17.1 per cent for 2013 compared with HP’s 16.6 per cent. Lenovo recently became a player in the tablet market as well and according to IDC, in the tablet space Lenovo assumed 3 per cent market share in 3Q 2013, and suddenly moved to 14.3 per cent, a very strong number two position just in a span of 2-3 months.

Will this move of acquiring Motorola boost Lenovo’s play in the multiscreen domain, is something to watch out for.

Lenovo’s rapid digital foray
It is Lenovo’s second major deal on U S soil in a week after its announcement to buy IBM’s low-end server business for USD 2.3 billion. Last evening, Lenovo also unveiled four new ThinkServer solutions aimed at providing more choice to the enterprise market, thus announcing serious foray in the enterprise space.

In 2005, Lenovo had muscled its way into what was then the world’s largest PC market by buying IBM’s personal computer division.

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