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ComputerMKII · Feb 7, 2014

Sell Motorola to Lenovo, then buy parts of Lenovo... that's weird

Google buys 6% stake in Chinese PC maker Lenovo

Google bought a near 6% stake in Lenovo for $750m (£459m), just a day after selling handset-maker Motorola Mobility to the Chinese PC maker.

According to a stock exchange filing, Google acquired 618.3 million Lenovo shares at $1.21 each on 30 January.

Last month, Lenovo spent a combined $5bn on buying Motorola Mobility and IBM's low-end server business - the two biggest deals in the company's history.

Lenovo shares were down by nearly 1% in Hong Kong on Friday.

Investors have criticised the Beijing-based company's recent acquisition spree, which has been aimed at offsetting its shrinking PC business.

Lenovo has lost 24% of its market value since the $2.91bn Motorola Mobility deal was announced on 29 January.

At least five major brokerages have also downgraded their outlook on the firm, which has publicly spoken about its desire to become a global player.

However, analysts are pessimistic about its most recent purchase, saying Lenovo may have overpaid and will face a tough time turning Motorola's unprofitable handset business around.

Global ambitions

Lenovo, which was founded in 1984 as a PC distributor, has grown largely due to high-profile global acquisitions.

Its 2005 purchase of IBM's Thinkpad business, for example, helped the company overtake Hewlett-Packard as the world's top PC maker in 2012.

But as more users shunned traditional PCs for more portable devices, Lenovo has been looking to expand its offering under the so-called PC Plus plan.

As a result, the firm has unveiled a line of lower-end tablets and smartphone that have sold well in China and other emerging markets.

It has also launched global marketing campaigns using Hollywood celebrities such as Ashton Kutcher, aimed at making the brand more globally recognised.

The company now hopes to produce more sophisticated offerings through its Motorola purchase, and crack the lucrative US and European markets.

The Motorola acquisition has already helped it leapfrog competitors in the global smartphone rankings.

From being the fifth largest smartphone seller in the world last year, it is now set to be the third.

Lenovo is scheduled to release its latest earnings on February 13.

http://www.bbc.co.uk/news/business-26079021

speedpop · Feb 7, 2014

I use a Lenovo laptop every day for work. It's the sturdiest laptop I have ever owned.

ISOM · Feb 7, 2014

speedpop said:
I use a Lenovo laptop every day for work. It's the sturdiest laptop I have ever owned.

Probably because they bought all the patents from IBM's toughbooks.

Wiktor · Feb 7, 2014

IGSaint said:
Probably because they bought all the patents from IBM's toughbooks.

Lenovo handled the buyout pretty much perfectly. THey simply got the whole team, offices, technologies etc. The only difference for Thinkpad teams was who signed their paychecks.

dc89 · Feb 7, 2014

Lenovo's business laptops are actually really good.

fudgey_lumpkins · Feb 7, 2014

I love my thinkpad. My only problem with Lenovo is that it takes forever for them to build and ship your order.

offcast · Feb 7, 2014

I love my thinkpad as well. Thing takes a beating and keeps on ticking!

Zertez · Feb 7, 2014

Smart moves by Google. They got an influx of cash, get to keep patents, and use a fraction of the new cash to buy a major voice in the boardroom. Not sure how close to a majority shareholder 6% is with a Red Chip company.

Nilaul · Feb 7, 2014

Hostile take over incoming.

Sir_Crocodile · Feb 7, 2014

So google sells motorola to lenovo then starts buying lenovo

neoanarch · Feb 7, 2014

Jeez, Google is really trying to win over the Chinese government. Or trying to assure Lenovo keeps making Android phones.

CMDBob · Feb 7, 2014

My god, this whole stuff is like one big human centipede of company stuff. Saying that, Lenovo seem to do the right thing, and having a bit of Google can only be... good?

inner-G · Feb 7, 2014

Great. Now buy another 45%.

F#A#Oo · Feb 7, 2014

inner-G said:
Great. Now buy another 45%.

No! Thinkpad's are great as is...

zomgbbqftw · Feb 7, 2014

"The purchase price is approximately US$2.91 billion (subject to certain adjustments), including US$1.41 billion paid at close, comprised of US$660 million in cash and US$750 million in Lenovo ordinary shares (subject to a share cap/floor). The remaining US$1.5 billion will be paid in the form of a three-year promissory note."

http://investor.google.com/releases/2014/0129.html

Nothing to see here. It's part of the MM sale, not a new strategic investment by Google.

zeroshiki · Feb 7, 2014

Thinkpads have actually gotten progressively shittier the further they got away from the time when IBM made them. They're still the top of the line business notebooks but they're not anymore far and away the best.

KorrZ · Feb 7, 2014

Lenovo is the absolute worst for pre-loading their PCs with garbage ware. Such a pain when we buy one of these for our customers, have to spend 1/2 an hour just uninstalling the garbage.

Wiktor · Feb 7, 2014

zeroshiki said:
Thinkpads have actually gotten progressively shittier the further they got away from the time when IBM made them. They're still the top of the line business notebooks but they're not anymore far and away the best.

Nah. Not the high end ones. They are just as good as they were and the brand improved in many areas. It's just that they expanded the line to much cheaper ones too and those tend to be far worse, since IBM didn't really make budget laptops.

Bit-Bit · Feb 7, 2014

I use a Lenovo T430 for work and it's amazing. I have tons of programs open and it never stutters even once.

j_k_redtail · Feb 7, 2014

Bit-Bit said:
I use a Lenovo T430 for work and it's amazing. I have tons of programs open and it never stutters even once.

My T430 backs up its SSD every night. Doesn't even sweat. I don't notice it.

AdrianWerner said:
Nah. Not the high end ones. They are just as good as they were and the brand improved in many areas. It's just that they expanded the line to much cheaper ones too and those tend to be far worse, since IBM didn't really make budget laptops.

T, X, or W series. Accept no substitutes.

Zen_Arcade · Feb 7, 2014

I have a Lenovo as a personal laptop at home. At the time I had never heard of the brand and just bought it off Amazon reviews. It's a great laptop though and I'll probably look at Lenovo first the next time I need a new one.

Captain Chaos · Feb 7, 2014

T510 went bust this week after 3 and a bit years of daily use. Great machine, but bit annoyed it didn't get to 5 years

Anyway replacing it with a T540 will be great

thelatestmodel · Feb 7, 2014

I have a Thinkpad W530 for work and it's amazing. Definitely my favorite manufacturer at the moment.

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