Lenovo aims to pass Samsung, Apple with Motorola purchase

Lenovo CEO Yang Yuanqing said he hopes the company's $2.91 billion purchase of Google's (NASDAQ:GOOG) Motorola Mobile division will help it to pass smartphone market leaders Samsung Electronics and Apple (NASDAQ:AAPL), though he acknowledged that would take time.

Lenovo CEO Yang Yuanqing


When asked about that possibility in an interview with Fortune, Yang said, "Definitely, over time. Our mission is to surpass them."

Research firm Strategy Analytics estimates a Lenovo-Motorola merger would give the combined entity a 6 percent global smartphone share in full-year 2013, and would make it the world's third largest smartphone vendor by volume, behind Samsung (32 percent) and Apple (15 percent).

According to both IDC and Strategy Analytics, Lenovo was the No. 4 global smartphone maker in the fourth quarter of 2013 and the No. 5 smartphone player for all of 2013. Yang said Lenovo hopes to sell more than 100 million smartphones in 2015. However, Lenovo would have a ways to go to catch Samsung and Apple, even with those figures. According to Strategy Analytics, in 2013 Samsung sold 319.8 million smartphones, Apple sold 153.4 million and Lenovo sold 45.5 million.

Lenovo is strong in its home market of China but has struggled to push into Western markets. Yang has said the company's tablets and smartphones will be entering the U.S. and Western European markets by 2015. Google said Lenovo will retain the Motorola brand, as it did when it acquired the ThinkPad brand from IBM in 2005. In the U.S. market, Yang said Lenovo hasn't made a final decision on branding. "Most likely we will leverage the Motorola brand, but it could be something like 'Motorola by Lenovo,'" he said.

Yang said growth will come from "both emerging markets and Motorola markets."

"Even though Motorola has a lot of influence in the U.S. and Latin America, the market share is still limited," he said. "So we still have very good opportunity to grow. We want to become a very decent player in these markets."

For Lenovo, which also agreed to purchase Intel's low-end server business earlier this week, it will now face regulatory reviews from the Committee on Foreign Investment in the United States. "We will cooperate with all the governments to go through the process," Yang said.

Experts see Lenovo passing those reviews, according to Reuters. Lenovo has passed CFIUS reviews before, including for the 2005 ThinkPad purchase. "If there was a Chinese company that was well-positioned to see this deal come off, it's Lenovo," Jim Lewis, a security expert with the think tank Center for Strategic and International Studies, told Reuters. "They've done the dance before and they know what the steps are."

For more:
- see this Fortune article
- see this Reuters article

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