Motorola Mobility’s red ink will soon be history, according to China’s Lenovo Group, which recently agreed to buy the struggling smartphone maker from Google for $2.9 billion. Today the company’s CEO told Bloomberg that it expects to achieve what Google could not, turning the business around within “a few quarters.”
Lenovo’s supplier relationships and manufacturing efficiencies could indeed turn Motorola’s device business into a money maker. The company could see even better pricing from suppliers as it negotiates from an increasingly powerful position after acquiring Motorola. “As a result of this new deal — assuming it is approved by US, Chinese and other authorities — Lenovo-Motorola becomes instantly the world’s 3rd largest smartphone vendor by volume, behind Samsung (32%) and Apple (15%),” said analyst Neil Mawston, executive director of Strategy Analytics.
Since becoming part of Google, Motorola has launched the first made-in-America smartphone, the Moto X, as well as the competitively priced Moto G, but both have failed to make big headwinds in the market.
Lenovo, meanwhile, has focused its smartphone efforts on the lower end, and has become one of the top five global smartphone makers, along with Samsung, Apple, LG and Huawei. The company says it shipped 13.9 million smartphones during the fourth quarter of 2013, up 47% from the year-ago quarter. Recently, Lenovo has moved toward the higher end of the smartphone market with the launch of the Vibe X.
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