Motorola deal to aid Lenovo to add smartphone share in U.S., Latin America

The $2.91 billion deal to buy Motorola smartphone business from Google will assist Lenovo to expand smartphone share in U.S., Latin America and Western Europe.

Motorola Mobility, which sells smartphones under Moto X and Moto G and the DROID Ultra series, is currently the #3 Android smartphone manufacturer in the U.S. and #3 manufacturer overall in Latin America.

Lenovo is currently the fifth largest smartphone brand in the world based on its shipments during the fourth quarter of 2013. It is behind Huawei and LG. Samsung is the smartphone market share leader, ahead of Apple, which is in the second position.

The purchase price is approximately $2.91 billion, including $1.41 billion paid at close, comprised of $660 million in cash and $750 million in Lenovo ordinary shares. The remaining $1.5 billion will be paid in the form of a three-year promissory note.

Lenovo will acquire Motorola Mobility, including the Motorola brand and Motorola Mobility’s portfolio of smartphones like the Moto X and Moto G and the DROID Ultra series.

In addition to current products, Lenovo will take ownership of the future Motorola Mobility product roadmap. This means Motorola brand will not disappear.

Lenovo to expand market share via Motorola

Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio.

“The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” said Yang Yuanqing, chairman and CEO of Lenovo.

“As part of Lenovo, Motorola Mobility will have a rapid path to achieving our goal of reaching the next 100 million people with the mobile Internet. With the recent launches of Moto X and Moto G, we have tremendous momentum right now and Lenovo’s hardware expertise and global reach will only help to accelerate this,” said Dennis Woodside, CEO, Motorola Mobility.

editor@gizmolead.com

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