So why did Google
sell Motorola to Lenovo? There are many different opinions about this. Here are
some: According to Sascha Segan, Google's mobile strategy is to get Android
onto as many phones as possible. Unlike Apple, BlackBerry, and Microsoft, most
of Google's revenue comes from advertising. This includes that on mobile
devices. Once Google bought Motorola, some of Google's major licensees started
developing or buying their own non-Google operating systems, because they were
concerned that Google would compete directly with them. Examples include Samsung with Tizen and LG
with WebOS. However, after selling Motorola, Google can be a neutral broker of
operating systems, and thus, make money. Futhermore, Google never made any
money from Motorola.
So now, the question
arises why Lenovo bought Motorola. Several reasons for this. First of all,
Lenovo is the top three smartphone maker, according to data from Gartner (Nov.
14, 2013). United States has one of the world's largest smartphone markets (which
does not come as a surprise). However, Lenovo's marketshare in the United
States is extremely small-- nearly zero. Lenovo's main business is in personal
computers, but unfortunately, its PC sales aren't growing. According to the
article I read, Segan's opinion was that, "if Lenovo is going to be a
technology leader in the late 2010s, it needs to be a mobile tech leader.
[Thus], assembling a global smartphone business is key."(Seegan 2014).
Furthermore, Lenovo has experience integrating and managing technologies based
in the United States. For example, Lenovo bought ThinkPad from IBM and made it
successful. According to the article, getting into the U.S. market is heavily
dependent on the relationships with U.S. carriers, ad Motorola's has developed
some really good relationships, such as
the Droid deal with Verizon Wireless. Since this transaction occurred pretty
recently, we will see how Lenovo fares!
You make a really interesting point. Additionally, Lenovo has experience in the low-end smartphone market and is actually a significant player in China and other international markets. I think they have the ability to take motorola to the next level and make a serious play for market leader in the low-end smartphone market.
ReplyDeleteI agree that there's potential in the low-end smartphone market. In general, smartphones are very powerful and priced accordingly. However, if Lenovo can provide lower-end options that are similarly functional and attractive to consumers, they might be finding a profitable niche in the smartphone industry.
ReplyDelete