Lenovo won’t stop at No. 3 in phones with Motorola, CEO says

BEIJING: Lenovo Group says its $2.91 billion purchase of Motorola Mobility from Google will help the company boost global smartphone sales and challenge market leaders Samsung Electronics and Apple.

“Lenovo will be number three in the global smartphone market, but definitely we will not stop here,” Chief Executive Officer Yang Yuanqing said in a telephone interview.

“We want to become the leader in the smartphone and mobile devices area.”

The Motorola name will help Lenovo win sales in mature markets such as the US and Europe, where its own handsets have made little headway, and serve as a premium brand in emerging markets, Yang said.

The acquisition, completed on Thursday, also gives Lenovo a new weapon in its battle for market share with Xiaomi Corp., which surpassed the Beijing-based company in third-quarter smartphone sales.

Lenovo boosted global smartphone shipments by 38 percent in the third quarter to 16.9 million units, ranking it fourth worldwide, International Data Corp. said Oct. 29. Its market share expanded to 5.2 percent, from 4.7 percent a year earlier.

Beijing-based Xiaomi surged to third place after more than tripling shipments to 17.3 million units, taking 5.3 percent of the global market, IDC said.

Samsung, based in Suwon, South Korea, remained the world’s largest smartphone vendor, with 23.8 percent, followed by Cupertino, California-based Apple with 12 percent, IDC said.

Motorola wasn’t among the top five vendors in IDC’s ranking.

Lenovo declined 0.5 percent to HK$11.42 at the close of trade Friday in Hong Kong.

The stock has advanced 21 percent this year, compared with a 3 percent gain for the city’s Hang Seng Index.

Motorola’s sales in Asia, Latin America and the US would have boosted Lenovo’s global ranking to third in the period, Kiranjeet Kaur, a Singapore-based analyst at IDC, said.

Their combined market share would have been 8 percent, Neil Mawston, executive director of researcher Strategy Analytics, wrote in an e-mail.

Lenovo has made inroads beyond China, with international markets accounting for 20 percent of third- quarter smartphone shipments, compared with 9 percent a year earlier, IDC said.

The payment for Motorola included $1.41 billion in cash and Lenovo stock at the completion of the purchase, and $1.5 billion in a three-year promissory note, Lenovo said.

Lenovo also paid Google about $228.5 million to account for cash and working capital remaining at Motorola at the close of the acquisition.