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Lenovo Group Ltd purchased Motorola Mobility, one of Google's subsidiaries, for not less than USD$2 billion.
This acquisition comes only a week after Lenovo disclosed its deal to purchase the x86 server from IBM Corp. for USD$2.3 billion. The move by Lenovo to acquire Motorola Mobility which has recently been incurring great financial losses is seen by analysts as advantageous to the Chinese multinational technology company as it seeks to enter the smartphone and tablet global markets.
A reliable source said that with the recent purchase, Lenovo will gain ownership of a huge volume of Motorola Mobility mobile communication patents. Lenovo has not given any comment on the matter on Wednesday but said details of the deal will be given the next day.
On Wednesday shares of Lenovo in Hong Kong was at its highest since the middle of 2000 at HK$10.96 ($1.40) per share, showing a 4.6 percent increase. According to Antonio Wang, associate director and project leader of IDC China, "Motorola will enable Lenovo to close the gap between Apple Inc. and Samsung Electronics Co in the mobile intelligent devices sector."
Wang added that the Motorola acquisition will help push Lenovo to become the world's third biggest smartphone seller. According to the IDC, Motorola has the biggest volume of mobile communication patents totaling about 17,000. Wang said these patents would be very important resources for a new and developing brand like Lenovo as it tries to compete in the global market.
Motorola was purchased by Google in 2011 for USD$12.5 billion. Analysts say that the purchase was meant to increase the popularity of the Android operating system for smartphones which is also owned by Google.
When Android's popularity skyrocketed, Google had no more use for Motorola Mobility which, based on Google's financial report, incurred a huge operating loss of USD$248 million in the third quarter of 2013.
