THE JOURNALS OF A CORPORATE SHOPAHOLIC

Just last week, Lenovo, the Chinese behemoth, announced a $2.3 billion deal involving the takeover of IBM’s low-end servers. As if that is the end of it, Lenovo stunned everyone when two days later that same week, they announced another $2.9 billion deal to acquire Motorola Mobility from Google. This totals the deals at $5.2 billion!

In case you are wondering, Motorola Mobility was the mobile phone business of Motorola bought by Google for $12.5 billion in 2012. Google intended to turn the tables around for Motorola Mobility with its powerful Android OS but the situation never really picked. In fact, the business keeps losing money quarter after quarter.

Google, considering the fact that Lenovo always had an eye for Motorola Mobility, strategically instigated this deal with Lenovo. More so, in the face of strong competition from the likes of Samsung and Microsoft, Lenovo is just the ideal candidate. This deal puts Lenovo in third place after Samsung and Apple. This benefits Google as Lenovo, the biggest PC maker in the world will become a proponent of the Android OS!

In the light of the dying PC market, Lenovo intends to diversify to ensure its future. This deal also poses a geographical advantage to Lenovo. 90% of Lenovo’s mobile phone sales is in China therefore this deal guarantees a US market infiltration and also the global market at large. Although Lenovo has announced that, it will keep the Motorola brand and it would not restrict the sales of Lenovo phones to china nor restrict Motorola phones to the US. In fact, both brands will be sold alongside each other.

A lot of people are sceptical about Lenovo’s moves as they feel Lenovo is biting more than they can chew – taking on IBM’s low-end server and Google’s Motorola Mobility almost at the same time. Google announced that Motorola Mobility lost $384 million in the last quarter. In the 30-year history of Lenovo, it has been known best for transforming dying businesses. The question here is, does Lenovo really have the Midas touch?

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