Opinion: Why is Lenovo buying Motorola and trying to get IBM’s servers?

Lenovo is now buying Motorola from Google. Well, not the whole company, but many of the hardware and consumer facing parts of the company that it would not be prudent for Google to own as they are the custodians of Android and ChromeOS. In other words, don’t compete directly (at least not too much) with your major hardware manufacturers.

But what about Lenovo? Why would they want to pick up Motorola with all the financial and product risks? As you may recall, Lenovo’s rise to prominence in the western world was their purchase of IBM’s personal computers including their popular and critically acclaimed Thinkpads.

So why take the extra risk? Because Lenovo is no longer without Chinese challengers for Western markets. More and more of the Chinese manufacturers are making moves to increase their profile abroad. Xiaomi scooped up on one of Google’s high profile Android gurus, Hugo Barra. Oppo and OnePlus worked closely with CyanogenMod to launch the first wave of Cyanogen smartphones, the Oppo N1 and the OnePlus. ZTE is making moves too, they were among the first wave of companies producing Firefox OS phones, starting with the ZTE Open. Meizu is going to be among the first to launch Ubuntu versions of their phones. And so on.

So that’s just a few examples. So if Lenovo is to maintain their competitive edge among western shoppers and IT professionals, they need to continue to be a step ahead of their many mainland China challengers!

And that leads Lenovo to another high profile move, in January 2014, after the CES 2014 madness quieted down, they revealed their plans to buy IBM’s low-end servers for over $2 billion. Whether this goes through or not is beyond the two companies since various government agencies can veto this. But regardless, even getting IBM to agree to this, increases Lenovo’s profile and competitive edge over the Xiaomis and ZTEs and Oppos.