China's Lenovo Group Ltd. 0992.HK -8.21% , once known as Legend, grew from a tiny government-funded venture in the 1980s to a global powerhouse that last year became the No. 1 personal-computer maker in the world.With its proposed $2.91 billion purchase of Google Inc. GOOG +2.57% 's unprofitable Motorola Mobility handset business, Lenovo is making a risky bet it can replicate that success in smartphones.
"This will be a good start to challenge the big players in smartphones," said Chief Executive Yang Yuanqing in an interview after the company announced the deal. "We want to become a global player."
The deal represents one of the boldest steps yet in the evolution of Lenovo, which started out in a tiny, one-story bungalow in Beijing, distributing foreign-made computers to Chinese homes. The company so far has built its successes largely on a ruthless ability to cut costs by manufacturing its PCs in-house, while building a reputation as a solid, reliable brand abroad. Lenovo's acquisition of International Business Machines Corp.'s IBM +0.54% PC business in 2005 helped establish the company's credibility globally, though many of its biggest sales inroads have been with businesses or in emerging markets.
But the Motorola purchase pushes Lenovo farther into the world of smartphones, with their picky, brand-conscious buyers. It puts the Chinese maker up against industry leaders Apple Inc. AAPL -0.19% and Samsung Electronics Co. 005930.SE -0.23% , two of the world's most recognized consumer brands. Neither Lenovo nor Motorola was on the list of top 100 brands in consultancy Interbrand's Best Global Brands 2013 survey, while Apple ranked No. 1 and Samsung came in at No. 8. Read more..
Source: Technology News
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