Lenovo is no stranger to major acquisitions — and that’s good news for Motorola Mobility.
Before it was the world’s top PC maker, Lenovo was a Chinese third-party computer maker without much of a brand of its own in the West. But after it snapped up IBM’s PC business and ThinkPad brand in 2005, Lenovo was able to quickly accelerate its presence outside of China and cemented itself as a leading computer maker.
Will history repeat itself for Lenovo’s $2.9 billion Motorola Mobility acquisition from Google?
I chatted with Lenovo’s President of North America, Jay Parker, to find out:
VentureBeat: How do you see Motorola fitting inside of Lenovo right now?
Jay Parker: It definitely accelerates our timeline to bring smartphones to mature markets, like Western Europe and the U.S. Motorola has a very strong presence here in the U.S., an important brand, a historical brand. They’re No. 3 in smartphones here [Google claims Motorola is the No. 3 smartphone maker in the U.S.]. They have a great relationship with Google, which is something we’ll bring over and which will strengthen our relationship with Google.
We have this concept of PC Plus. We’re expanding our business into adjacent technology areas, and now in a very short time we’ve done that in both servers and smartphones.
VB: Does this change Lenovo’s relationship with Google?
JP: Google’s an extremely important player in our ecosystem obviously … we had a very strong relationship prior to this deal. I see this doing nothing but strengthening what we have going forward, and our abiity to plan and develop products together.
VB: When will we see the first new devices from Motorola under Lenovo?
JP: Our plan is to bring over the brand, the trademarks, and the products that they have under development right now, including the Moto X and Moto G, as well as the Droid. Exactly when that happens, and what goes beyond that, depends on how successful we are and how fast we are collectively when we close this deal.
VB: Will anything change for existing customers of the Moto X? Will Lenovo be providing any services to them?
JP: Maybe in the long term. Right now our job is to integrate that business once the deal closes, to turn it around to profitability, and ultimately once we go through that process we’ll learn what makes sense in terms of bringing Lenovo capabilities to Motorola’s side. We’re also very excited to have the technical expertise, sales, marketing, and distribution expertise for smartphones. We’re looking forward to bringing that in Lenovo.
VB: Do you have a sense how Lenovo and Motorola’s technology will coexist?
JP: We’re still working through those specific integration plans. I can tell you the Motorola business, once the deal is consummated, will report to Liu Jun, our head of mobile Internet and digital home worldwide. It will be part of that business unit, not a standalone division, so to speak. But exactly how the integration and how the collaboration works … we’ll be working that out between now and the deal consummation.
VB: How will Lenovo handle Motorola differently than Google did?
JP: What you should know about Lenovo is that we are committed to the hardware business, whether it be PCs, servers, or in this case smartphones. We’re also very good at it — in terms of our efficiency and supply chain, and our ability to squeeze profits out of thin markets.
That’s ultimately what the hardware business is about.
Our culture has also developed an expertise at integrating acquired companies. Our heritage comes from that, with the acquisition of the IBM PC company, but also some less public acquisitions like the NEC PC company.
VB: Is there anything you’ve learned from the IBM PC acquisition that you’re going to apply to this deal?
JP: One thing we learned is that we have to protect the brand and what made that brand popular with consumers from the beginning. That’s what we did with Think[pad], and that’s what we’ll do with Motorola and their sub-brands. They have a long and very important history in the phone market and further back. We’re not looking to change that, but rather to build on that and ensure we can use our expertise to make it a sustainable standalone business.
VB: I’ve heard from a couple people that Google has had trouble managing the Chicago team. Is that something you’ve thought about?
JP: We have no plans to change the location of the Motorola business unit. It will remain in the Chicago area. Of course, any acquisition, especially one very remote in terms of location relative to our headquarters, offers its challenges. But again, we’ve done that with acquisitions spread out across the world, and we don’t anticipate an issue in Chicago with Motorola.
VB: Could Motorola’s technology eventually make its way to other Lenovo devices? Maybe something integrated with PCs?
JP: One of the pieces of this acquisition is intellectual property — Google will keep a majority of it, but we will have very good cross-licensing agreements in place for that. As part of this, we’ve also acquired 2,000 patents specifically related to mobility. We’ll be investigating and analyzing if any of those are applicable to our broader business.
You could foresee a time, as devices kind of get to a grey area between computing and communications devices, where those patents may be applicable across multiple device types. In which case, we’d obviously take advantage of that.
Maybe this goes without saying, but any intellectual property developed after the close of the deal belongs solely to Lenovo. Given that two-thirds of the people at Motorola Mobility are in technical fields, engineering, hardware, or software, we believe there will be a lot of IP developed after the deal is closed.
VB: I saw that Google is holding onto Motorola Mobility’s advanced technology group. Is there any chance innovations from that group will be licensed to Lenovo down the line?
JP: It’s too early to tell. It’s not part of this acquisition, it’s something we’d work with Google on as part of our normal business partnership.