Jeff Kagan: Why Does Lenovo Want Motorola?

Jeff Kagan  |

I think Lenovo wants to get their hands on Motorola because it fits their model for the future of their company and the industry. What do I mean? It’s all about the cloud. It’s what the wireless and computing industry will look like going forward. Let’s pull the camera back and take a close look at this industry and how it is reshaping itself. You may be surprised.

The last major transformation of wireless happened roughly seven years ago with the Apple (AAPL) iPhone. Now the iCloud let’s users store all their information on the iCloud and access it on any Apple device like the iPhone, iPad, Mac and so on. Apple is one of the leaders redefining this new cloud space.

Google (GOOG) Android is doing this same thing. Google makes the Android operating system that many phone makers like Samsung use. Look at what Samsung is doing with their Galaxy S4 phones and Galaxy Note tablets. They let users buy multiple devices and store information on the cloud as well. Google does not seem to have as much success with hardware as they do with Android.

Now Microsoft Corporation (MSFT) is heading in the same direction. They are acquiring Nokia (NOK) phones and are offering their bundle of laptops, wireless Lumia smartphones and Surface tablets with information stored on the cloud.

Getting a clue to what the marketplace is going to look like going forward? All about a variety of handsets, which share information and store it on the cloud. This is an opportunity for both networks and equipment makers.

Lenovo sees this as well and wants to be a player in this space going forward. They want to sell computers and laptops, tablets, smartphones and store all the information on the cloud. And they want to be a leader in this new space.

This is the same direction many other companies are thinking about right now. A few I mentioned above. Others will be announced going forward.

Wireless as an industry transforms every five to ten years. The last major transformation was when the super smartphone revolution started with the Apple iPhone and Google Android, roughly seven years ago.

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This next transformation started last year and is picking up steam now. It’s all about having a variety of devices, which work together and store information on the cloud, not on the device itself.

That’s the world that Lenovo wants to be a power player in. Every time the industry shifts, new leaders rise to the top. This time is it about the networks and about the handset makers. The networks offer their cloud based service and putting all devices under one account for better management and other important features.

It’s also a new opportunity for handset makers and computer makers trying to lead in this new space. What links all these devices together? The wireless cloud. Storing online instead of on the device.

Customers are not all familiar with the cloud and those who are, still are not comfortable with it yet. However this will pass and the companies getting an early start could be the early winners.

That’s what Lenovo wants with Motorola. Motorola is an older and tired brand, but it is also the oldest and best-known brand in the business. If they can refresh their brand they could indeed be one of the success stories in this next wave of wireless innovation.

So I think Lenovo wants to create hot new smartphones with the Motorola brand, and link it together with the Lenovo computers and tablets, and store all the information on the cloud. The cloud will either be sold by Lenovo to the customer, or it will be sold by the wireless network, or perhaps a third party cloud service used by the company.

However, first this merger must be approved. Will it? That’s the million-dollar question. The US Government has issued strong warnings to American wireless companies in recent years about security threats posed by Chinese owned companies which make handsets. Will this be an issue?

On the other hand Lenovo is already one of the biggest and strongest brands in the computer space. And Lenovo is already all over America. If that is the case, adding wireless phones should be no big deal right?

However I can’t say which way the winds will blow so we’ll just have to wait and see. But Lenovo wants Motorola because of the well-known brand. That will mean a lot to them as they grow in this new area.

Either way, this is the new direction the wireless and computer industry is moving in. We already see several heavy hitters moving in this direction. I expect to see many more. Who will lead in this new space?

The current leaders are obvious front-runners. However we also see leadership change at times like this. Remember when Motorola led in the 1990’s? Remember when Nokia and Blackberry led since then until the Apple iPhone and Google Android were born roughly seven years ago?

So what will happen next? That is the big question. But this move illustrates the playing field the game will be played on.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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