Monthly Archives: February 2014

COMM 296 Blog 2 Why did Lenovo buy Motorola

At the end of last month, search giant Google announced to sell Motorola smartphone phone business to Lenovo for $2.9 billions. Google bought Motorola with more than 12 billion in 2012,however,Motorola has lost nearly $2 billion since Google took over, while trimming its workforce from 20,000 to 3,800.

After taking over the Motorola, the share price of Lenovo fell by about 20% because people think the value of Motorola is overestimated which means Lenovo bought Motorola at a “bad price”.

From the marketing perspective, I don’t think Lenovo bought Motorola wrong. Lenovo didn’t have a global recognization before took over the IBM. Brand image is very important in a competitive market as Smartphone market and PC/laptop market. With the brand of Motorola, Lenovo will be able to immediately get a quite significant market share.

In addition, before Lenovo officially bought Motorola, there was also some news that Lenovo might buy BlackBerry. However that was finally stopped by Canadian government. BlackBerry is   famous with its reliable and secure system and its clients are mainly enterprise and government users. These years, when Chinese companies try to do some turnovers overseas, they  always meet this kind of this situation, just because they are “chinese companies”. This shows that it’s very important to be aware of Political rules before making a market decision.