Can Lenovo do an IBM with Motorola?

Years down the line, whenever there is a discussion about Lenovo, 30 January 2014 is likely to get a special mention. It will be seen as the day it took a big step towards becoming a dominant player in the smartphone sector. Once completed, Lenovo's deal to acquire Motorola Mobility for $2.91bn (£1.8bn) will see it become the world's third-biggest smartphone maker. That is a big achievement, not least because until just two years ago Lenovo's global market share was negligible. "This is a great position for Lenovo to be in, as it looks to power the next chapter of its growth," says Manoj Menon, managing director of consulting firm Frost and Sullivan. 'Launch pad' However, most of its growth in the sector so far has been fuelled by China, which, with nearly 1.2 billion mobile phone subscribers, is one of the fastest growing markets for smartphones. It is also benefiting from the growing demand for low-cost smartphones from other emerging markets. But it has so far failed to make a mark in developed economies such as the US. Analysts say Lenovo's Motorola deal could help it crack these markets. "This could be the launch pad that Lenovo so desperately needed to become a significant global player," says Melissa Chau, a senior research manager with research firm IDC.

Smartphone Global Market Share - 2013
Ranking	Vendor	Sales
1. Samsung 31.3%
2. Apple 15.3%
3. Huawei 4.9%
4. LG 4.8%
5. Lenovo 4.5%
SOURCE: IDC WORLDWIDE MOBILE PHONE TRACKER

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Smartphone Global Market Share - 2013
Ranking	Vendor	Sales
SOURCE: IDC WORLDWIDE MOBILE PHONE TRACKER
1.	Samsung	31.3%
2.	Apple	15.3%
3.	Huawei	4.9%
4.	LG	4.8%
5.	Lenovo	4.5%

Many mobile phone carriers subsidise handsets for consumers in developed economies, meaning manufacturers need to work closely with carriers to boost their sales. This is where, analysts say, Motorola's brand image could help. Lenovo's acquisition of IBM's PC business in 2005 - featuring the ThinkPad range - is seen as key to it overtaking Hewlett-Packard as the world's top PC maker in 2012. "Using Motorola, just as Lenovo used the IBM ThinkPad brand, to gain quick credibility and access to desirable markets and build critical mass makes a lot of sense," says Frank Gillett, an analyst with Forrester Research. Motorola is currently the third-biggest Android-based smartphone manufacturer in the US. It also works with more than 50 mobile phone carriers across the globe.