Can Lenovo do an IBM once again with Motorola

Year back it is just rumours that Lenovo and Motorola going to be joint venture do something new in mobile (smartphone) industries, when this is discussed on last month about the mergers in this segments Google is selling Motorola cell phone unit to Lenovo in addition to this new that makes it special that is Lenovo will as IBM thinkpad on smartphone segment as well.

It will be realised as the day it took a big stage towards becoming a dominant player in the smartphone sector. It accomplished, Lenovo's deal to obtain Motorola Mobility for $2.91bn (£1.8bn) will see it grow into the world's third-biggest smartphone maker. That is a big accomplishment, not least for the reason that until just two years ago Lenovo's global market share was insignificant.

This is an abundant position for Lenovo to be in, as it appearances to power the next chapter of its growth

Launch pad of lenovo Motorola

Nevertheless, most of its growth in the sector therefore far has been fuelled by China, which with approximately 1.2 billion mobile phone subscribers is one of the fastest rising markets for smartphones. It is similarly benefiting from the rising demand for low-cost smartphones from additional emerging markets.

However it has consequently far failed to make a mark in developed economies such as the US. Analysts at a guess Lenovo's Motorola deal could aid it crack these markets.

As told by Melissa Chau the senior research manager with research firm IDC that this could be the launch pad that Lenovo so desperately needed to become a significant global player. Several mobile phone transporters subsidise handsets for consumers in developed economies, meaning manufacturers necessity to work closely with carriers to boost their sales.

This is where analysts at a guess that Motorola's brand image could aid.

Lenovo's acquirement of IBM's PC business in year 2005 that featuring the ThinkPad range is seen as key to it overtaking Hewlett-Packard as the world's leader PC maker in 2012. In addition to this business takeover Frank Gillett an analyst with Forrester Research says that Using Motorola just like as Lenovo used the IBM ThinkPad brand, to gain rapid credibility as well as access to wanted markets also build critical mass makes a lot of sense

Motorola is presently the third-biggest Android-based smartphone maker in the US. It as well works with more than fifty mobile phone shippers through the globe.

PC-Plus strategy will work in smartphone segment

The achievement of its smartphone business is significant to Lenovo's future growth for the reason that of the decline in global PC sales - which have currently fallen for six quarters in a row as well as are forecast to fall further.

In an attempt to develop the world's biggest computer maker, Lenovo has expressed a PC Plus strategy that comprises manufacturing devices such as laptops and smartphones and tablets or servers.

Previous this month, it proclaimed a deal to buy IBM's low-end server division for $2.3bn.

Lenovo's joint sales of smartphones as well as tablets have now exceeded those of PCs for two straight quarters. As well as their chief financial officer, Mr. Wong Waiming, speaks that the Motorola deal will permit it to offer devices across various price ranges.

What will be Growth hurdles

However Motorola's market share has dropped in recent years among increased competition.

Not any of its latest products have produced a buzz amongst consumers being offered a range of new models by rival manufacturers. Motorola hasn't been shooting the lights out with designs or sales volumes in smartphones according to the Mr Gillett.

There is as well a huge gap between Lenovo as well as the market leaders Samsung and Apple. Even subsequently the deal is completed, Samsung's market share will be approximately five times that of Lenovo, while Apple's will be nearly two-and-a-half times bigger.

It is improbable that merely obtaining a brand name will help Lenovo close that gap.

Numerous analysts say product innovation, pricing as well as getting the marketing strategy right will be key to exactly how successful this deal turns out to be. The one thing going in Lenovo's goodwill is that it has shown in the past - with the IBM PC deal - that it can take on a loss-making business also turn it into a global leader.

The solitary question is can it do it all over yet again?

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