Lenovo And Motorola Hold 8% Share of Global Smartphone Market [Report]
Few days back, Lenovo and Motorola completed their deal to merge the smartphone division. Now the two companies have become one. According to the report published in Strategy Analytics, Now Lenovo and Motorola will hold approx 8% share of the World Global smartphone sales. Google acquired Motorola 2 years back in a whooping price of $12.5 billion. After that Google launched successful Moto series of smartphones. But managing a smartphone company was not easy enough for Google, so it sold Motorola to Lenovo. But, Google retained the large portion of Motorola’s patents and advance research unit of Motorola.
Lenovo Chairman and CEO, Yang Yuanqing said after the acquisition,”Today we achieved a historic milestone for Lenovo and for Motorola – and together we are ready to compete, grow and win in the global smartphone market. By building a strong number three and a credible challenger to the top two in smartphones, we will give the market something it has needed: choice, competition and a new spark of innovation,”
Motorola has gained a huge success this year by bringing some new smartphone in different price range. Under 10k we have Moto E, moving forward between 10k and 15k we have Moto G and Moto G (2nd Generation), moving again forward in price range between 20k and 25k we have Moto X and Moto X(2nd Generation). In Conclusion Motorola has given limited but best choices to consumers in every price range. Though Google never confirmed the actual selling numbers, but it was confirmed that Moto G is their best selling smartphone of history. Every acquisition that took place has pros and cons which take some time to settle down. Lets discuss about Motorola’s acquisition by Lenovo.
First of all we will discuss the pros. Lenovo independently has 5% Global smartphone sales market in Q3 2014 and in the contrary Motorola has 3% has Global smartphone market share. Now they will hava 8% of the Global smartphone sales market together. Secondly, Now the firm will be able to deepen its business in different market around the world and lastly, both firm will now be able to spend more money on research and development and also can borrow more fund from the market. This is all about the advantages of their collaboration.
Now lets discuss the the disadvantages of of the acquisition. Firstly, Lenovo is a draining boat in smartphone market because there are lot many competitors like Xiaomi, Huawei and Xolo. Recently there are reports that Xiaomi has become the 3rd largest smartphone vendor globally. Secondly, if we see the reports of strategy analytics Motorola has not made profit since 4 years. Lastly, there are acquisition happened in the past that have taken approximately years to generate profit. So if we are thinking that Lenovo will start generating profits from the beginning, I guess we are wrong. Things will take time to stabilize and lets see what will happen in coming years.
After the acquisition, Lenovo said it will continue to sell the US brand in India as the country is one of the the most important market. Lenovo and Motorola combined ranks third in the Indian market after Micromax and Samsung. Lenovo also added that the it will follow dual brand strategy for the emerging markets like India. India is among the countries which are fastest growing in the sense of demand of smartphones. According to the reports published in IDC, 63.21 million smartphones were shipped in India in the second Quatar of 2014. The ratio of firm are like 29% Samsung, 18% Micromax and 8% Karbonn and Motorola share is 5%. With the completion of this acquisition Lenovo has added 3500 more employees globally in which 2800 are US based.
In conclusion, Lenovo and Motorola are both strong firms before the acquisition in the field technology. Lenovo is losing market in smartphones and Motorola is losing money since the firm has not generated the profit since 4 years. So we don’t think merging of these firms will make things easy as expected. It will take time and we have to see what are their plans and how they will execute.