When Lenovo CEO Yuanqing Yang was asked if his company could catch up with Samsung and Apple, he confidently replied: ‘Definitely, over time. Our mission is to surpass them.’ A bold statement? Yes. Deluded? Possibly. But you can’t fault Yang’s ambition.
The manufacturer celebrated Chinese New Year with the purchase of Motorola Mobility last week in a move that caught the eye, if not the imagination. This year is set to be the year of the horse in the Chinese zodiac, although Lenovo hopes 2014 will prove to be the year of the underdog. It’s going to take an awful lot of work and a phenomenal investment to put the ailing smartphone maker back on the map.
Google’s $12.5 billion acquisition of Motorola in May 2012 was lauded as a milestone moment in the industry, and it looked as though the backing of the internet giant and Android developer would thrust the company back to the top table of the mobile market yet again. However, that backing failed to materialise as jobs were cut and market share and profits tumbled. During the last quarter of Google ownership, Motorola Mobility posted a $384 million (£233 million) loss. It was a consistent theme throughout the relationship, so it’s no surprise Lenovo scooped Moto up for a fraction of Google’s outlay, although it maintains patent portfolio ownership.
So what next? It appears obvious that Lenovo will make a beeline for the lucrative American market, where compatriots Huawei and ZTE have failed to find significant traction. Motorola still has status in the US, so its new parent company may find fertile ground and the chance to compete with the big boys.
Its future progress in the UK market is more difficult to predict. Motorola’s UK chief Andrew Morley beamed with optimism when he told Mobile that the launch of the Moto X would be the catalyst for market share growth. It seems other devices are in the pipeline as operators and retailers offer their backing. But will Lenovo’s strategy differ from the existing roadmap?
No thought has operators and retailers salivating at the mouth more than the prospect of a legitimate contender to the Samsung/Apple duopoly. To compete, though, Lenovo would be required to invest heavily in new, sleek devices and an enticing point of sale campaign. Even then, Motorola’s status in the UK means that, at time of writing, its ability to take on Samsung and Apple looks fairly remote. Lenovo may even decide its own brand is a safer bet in specific markets, as reviving a beleaguered old brand is likely to be even more difficult than pushing a new one. Whatever it does, there’s much endeavour needed to succeed where Google failed.