On Thursday, Chinese tech giant Lenovo announced that it had completed its US$2.9 billion acquisition of Motorola from Google. The deal had been in the cards for some time, many didn’t expect to see it finalized quite so quickly, but now it’s official: Motorola is a wholly-owned subsidiary of Lenovo.
Of course, that doesn’t mean the Motorola brand as we know it is about to disappear. Motorola will continue to operate from its Chicago headquarters with president Rick Osterloh at the helm. Osterloh says that the deal will double the number of countries Motorola products are offered in thanks to Lenovo’s broad reach, and it definitely gives the US-based company a new foothold in the massive Chinese mobile market. But Motorola will still be Motorola.
When I heard the deal had been finalized, though, my first thought was to wonder what effect it will have on Lenovo’s plans to compete with Xiaomi. Earlier this month, the company announced that it was spinning off a new subsidiary that would, under new branding, focus on high-performance, low cost smart devices for China’s young mobile users. And while that new brand certainly won’t be Motorola, there are a couple ways it seems the Motorola acquisition could help.
To begin with, Motorola has experience that it can likely share with Lenovo in producing top-quality low-cost smartphones. For example the company’s Moto E model, which launched earlier this year, has gotten pretty good reviews despite its bargain basement pricing. If it wants to, Lenovo’s new subsidiary now will be able to draw on Motorola’s hardware and software expertise as it works to design a phone for China at a similar price point.
And beyond its experience, Motorola brings another valuable asset to the table: patents. According to Recode, most of Motorola’s patents still belong to Google, but Lenovo has acquired a license to them as part of the acquisition deal, and another 2,000-plus patents were transferred as part of the deal and are now owned by Lenovo. It’s hard to say for sure whether this access will allow Lenovo to produce a better top-end smartphone for China – and more importantly, to produce it cheaply – but it certainly won’t hurt!
Given that the new company won’t even begin operations until April 2015, we’re still quite a long way off from seeing what products it will bring to the market and how, if at all, this Motorola acquisition may influence them. But with the intense competition in China’s valuable low-cost smartphone market, any edge you can get helps. And in Motorola, Lenovo may have just purchased itself a little bit of edge.
How Lenovo’s Motorola acquisition could help it take on Xiaomi
No comments:
Post a Comment