A recent IT World Canada article highlights the purchase of the Motorola Brand of cell phone handsets by Lenovo.
We all have become aware of Lenovo as they purchased the IBM Thinkpad PC business and then have gone on to add many more pieces to their operations. Today they are the number one PC brand by volume, have a solid foothold in tablets and are big players in the cell phone market, although not in North America. Last fall one of our reps from Lenovo indicated that they were looking at the North America phone market in the future. With the proposed purchase of Motorola's cell business they once again acquire an iconic brand in a specific part of the tech market.
Whether Lenovo will be successful with this purchase and eventually bring their brand to the cell handset market in Canada and the US will take time to see but so far they have been highly successful in each of the hardware businesses they have entered. One of the things which has helped has been their success in the native Chinese market as technology continues to grow in importance in that domestic area.
When we look at the world from a North American perspective we forget that there are many more potential consumers in the Asian and other overseas markets and the integration of smaller technology devices into everyday live is expanding as fast or faster than in North America.
One other area of interest that the article references is where the purchase is coming from. The vendor in this case is Google which bought the Motorolla handset business only a couple of years ago. Its interesting to see that Google did not find this a viable product area for them and are letting the division go at a very low relative price and a significant loss. What does this mean for other Google hardware products? Are they only able to be successful as the initiators or in the software side of the market? Its hard to tell but certainly other companies have struggled with this type of challenge where moving into the hardware business makes them essentially a competitor with their major customers.
Perhaps with the sale of their handset operations they will become less of a threat to other cell manufacturers and will help to keep the Google developed Android operating system a key player in the device market.
It is understood that technology hardware manufacturing is a very challenging venture. Just look at what has happened to Blackberry, Qualicom, Ericson and others in the phone business. Major competitors Dell and HP are increasingly focusing their attention on IT services instead of hardware. If Lenovo is able to pull off a success in the cell handset business as they have done in PCs then it will be quite remarkable to see.
What do you think? Can Lenovo make an impact on cell phones in North America? Is this a sensible focus for them?
Share your thoughts....
Lee K
Photo Credit: By Juandev (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons
