Motorola has been known for years to assemble many of its products in the US, although this was in doubt when they were looking for a buyer several years ago. Thankfully, it was Google who bought them out and so Motorola were still able to continue assembling devices in the United States. However, the recent takeover by Lenovo could change all that.
Last week Lenovo purchased Motorola for $2.9 billion, but only for the Motorola Mobility part of the company. This is a huge win for Lenovo because not only have they been enjoying a rise in its stock shares, but also the fact that they now have the ability to build some amazing smartphones.
There will be some skeptics wondering what the reasoning for this Lenovo-Motorola acquisition is, and it is very simple really, it’s a strategic move. This is because Lenovo do not want to solely rely on PC sales in China to help bolster profits, although investors don’t see it that way and as such has seen stock take a dive since the announcement of this acquisition.
This deal still has a few hurdles to jump over before it is allowed to go ahead, but if it does we are sure that investors will calm down, as the dumping of these shares has to be expected because we know people make hasty decisions when change is afoot.
An interesting article on Businessweek has offered its own insight into the Lenovo-Motorola acquisition, such as the fact that Lenovo looks as though it is only paying for the Motorola brand, as it does not include patents.
However, this does not stop Lenovo from getting a lot from this deal, such as being able to get noticed in other countries where Motorola has a strong presence, such as Latin America. This is another growing market, and while not on the same scale as China or India, it’s certainly one that Lenovo would like to get a foothold in.
Lenovo has proven analysts and skeptics wrong before when they bought out IBM, and so they believe to be able to repeat this success in the smartphone world, but can they?