Acquisition of Motorola to fuel sales of smartphones

A decorated stairwell at Motorola Mobility global headquarters is seen at their public unveiling in Chicago, Illinois, April 22, 2014. [Photo/Agencies]

Lenovo Group Ltd has set a goal of 100 million smartphone and tablet sales in its new fiscal year, a company executive said on Tuesday.

The world's largest personal computer maker is eagerly expecting its mobility team to bring home profits as the global PC market continues to show no signs of recovery.

Yang Yuanqing, the CEO of Lenovo, said the acquisition of Motorola Mobility will fuel its sales in the smartphone market once the deal is closed sometime between July and September. Yang said he expects 80 million smartphones and 20 million tablets to be sold in the fiscal year that kicked off on April 1.

"We have to look outside China for a bigger market share and higher profit margins," said Yang, adding that the acquisition also will strengthen its partnership with Google Inc, owner of Android, the world's most popular mobile operating system.

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Lenovo purchased Motorola from Google earlier this year for $2.9 billion.

"Motorola will be operated as a separate brand after the acquisition," said Liu Jun, executive vice-president of Lenovo and head of its mobility business.

The brand "will enable us to become a strong No 3 in the market," Liu added.

Apple Inc and Samsung Electronics Co Ltd currently lead in terms of market share.

Motorola's focus will be on Western Europe and North America for bigger market share from high-end customers, said Liu.

Lenovo is setting a high bar for itself. Last year, it sold roughly 94 million smart-connected devices, including smartphones, tablets and smart televisions, slightly missing the company's target of 100 million units.

In 2013, Lenovo sold 50 million smartphones globally, a jump of nearly 60 percent year-on-year. Most were sold in China, where mid- and low-end phones still enjoy huge demand.

Annual smartphone volume exceeded 1 billion for the first time last year, according to research company IDC. The shipment numbers are expected to hit 1.2 billion in 2014.

"2014 will be an enormous transition year for the market, because not only will growth decline more than before, but the driving forces behind smartphone adoption are changing," said Ryan Reith, program director at IDC.

As the personal computer remains Lenovo's largest profit contributor, the company is hoping its global market share in the sector will break 20 percent by the end of the fiscal year. It also is betting on server, storage and start-up cloud computing businesses to generate profits.

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