Lenovo completes Motorola Mobility acquisition

Lenovo has announced the completion of its acquisition of Motorola Mobility from Google, claiming that makes it the 3rd largest smartphone maker in the world. The company said it expects the mobile firm it purchased for a total of $2.91 billion to be profitable within four to six quarters.

So far Lenovo has indicated the move will not mean any job losses, saying it welcomes the addition of almost 3,500 Motorola employees across the world, 2,800 of them in the US. The Motorola headquarters will also remain in place in Chicago, as will the current President and CEO, Rick Osterloch.

“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,” Lenovo Chairman and CEO Yang Yuanqing said. “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 is in great hands with Lenovo, a company that’s all-in on making great devices,” Google CEO Larry Page said.

Google will still own the majority of the patents behind such smartphones as the Moto X, Moto G, Moto E and DROID. Motorola will get a licence to access the patents, as well as retaining over 2,000 patent assets, cross-licence agreements and the Motorola Mobility brand and trademark portfolio.

“Motorola has already built solid momentum in the market, and their recent results show consumers are excited about their exceptional products that stand out for their design and simplicity,” Lenovo’s Mobile Business Group President and CEO Liu Jun said. “With the complementary strengths of our two companies, we expect to sell more than 100 million mobile devices this year – including smartphones and tablets – by leveraging the Lenovo brand’s leading market position in China, our shared momentum in emerging markets, and Motorola’s strong foothold in mature markets like the US”

Lenovo recently announced it is opening an Internet-based, direct-to-consumer mobile business in China to compete with disruptive player Xiaomi, which has made big gains in the Chinese market. With the Motorola acquisition Lenovo intends to intensify its efforts in mature markets.

“This partnership has always been a perfect fit.  Lenovo has a clear strategy, great global scale, and proven operational excellence,” Yuanqing said. “Motorola brings a strong presence in the US and other mature markets, great carrier relationships, an iconic brand, a strong IP portfolio and an incredibly talented team.  This is a winning combination.”

With the addition of Motorola, Lenovo’s claim now to be the 3rd largest smartphone business in the world is pretty spot on. However, it is worth noting the company was already on fourth place without Moto, meaning the change is more like a step rather than a leap. The development is more significant in terms of the company taking a more prominent role in the West as most of its current mobile shipments are in the Chinese market.