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Case Study: Why Did Lenovo Buy Motorola?

856 Words4 Pages

Why did Lenovo buy Motorola?
This deal that happened between Lenovo and Google must be seen from two perspectives.
From Lenovo 's perspective, it 's a deal that they could only dream of. Google paid $12billion to get Motorola, while on the other hand, Lenovo is able to get a globally recognized brand to complement its ThinkPad (which Lenovo acquired from IBM) in the tablet/mobile space.

Lenovo, being one of the world 's top five smart phone makers has a zero market share in the US markets which is one of the largest markets for smart phones. Motorola on the other hand, has been in the US markets for 85 years while it has a poor distribution in other markets.

Lenovo’s biggest business is PCs and it is the world’s number 1 PC maker. But the …show more content…

Lenovo has a strong enterprise relationship with its ThinkPad and ThinkCenter products and it doesn 't just want to be a consumer smartphone maker. BY also offering phones, it can deliver full technology packages to its U.S. business clients.

In simple terms, Lenovo wants a cell phone business that is viable. Post the acquisition, it gets to be the third largest mobile device manufacturer in the world. Also, through this acquisition, Lenovo gets to compete with Samsung more effectively across a broader spectrum of growth markets.
Motorola, unlike Lenovo is a known name in US and other important markets of Western Europe and Latin America and has a strong foothold in the US and Latin America having 52% of its revenues from US and 20% of its revenues from the Latin American market, which Lenovo can get access to with the deal, thus having a much easier way of entering these markets and giving it in roads.
Add to that, Lenovo also gets a company that has an impressive spend on R&D as compared to that of Lenovo. This would do a lot of good things to Lenovo if they are able to guide Motorola properly.

By having Motorola, Lenovo got access to patents as well as an important strategic relationship with Google. A strategic relationship with Google, the owners of Android will give Lenovo more control on its mobility

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