Lenovo And Motorola Are Set For Take-Off In The U.S. Mobile Market

Motorola is at the top of its game, and is set to make big strides in the U.S. mobile market.

Google sold the Chicago-based company to Lenovo just last week for $2.9 billion, and experts said that this is "bad news" for the top Android vendors.

"The U.S. smartphone market is really a two-horse race between Apple and Samsung, and most big markets need a third player. Motorola can be that third player," said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, a leading tech analyst firm based in Austin, Texas. "I think Motorola is definitely on par with Samsung technologically, but for the last few years when they were owned by Google, they were fighting with one arm tied behind their back. Google couldn’t market Motorola too hard without angering their other Android brands. I believe in the next six months to a year we'll see a large mobility play from Lenovo and Motorola."

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Samsung's smartphone business already has seen a large fall from grace as its worldwide market share dropped from 32.5 percent to 23.8 percent in the last year, according to IDC. The Korean tech giant was the only top-five vendor to see a year-over-year decline in a market that grew by 25.2 percent.

Samsung is still the leader in the space, but it has been edged out by Chinese vendors such as Lenovo, Xiaomi and Huawei in the entry- to mid-level smartphone market, and continues to compete with Apple in high-end markets.

Under Lenovo, Samsung and other top Android vendors will see increased competition in developed smartphone markets.

"This deal is definitely bad news for Samsung," said Moorhead. "Samsung, HTC and Sony are companies that get hurt by this. I think, over time, Lenovo and Motorola can bring the pain, and there will be a push of Motorola into business as well. I don't see an impact to Apple as they've set themselves apart. It really is just an Android-vs.-Android battle here."

Recently, Motorola has had two big releases in the high-end smartphone space. Prior to its sale to Lenovo, the company manufactured the Google Nexus 6, Google's new flagship smartphone, and just last week it launched the Droid Turbo in the United States. An international version of the phone will be released in the Moto Maxx. The phone features high-end specs, including a 5.2-inch AMOLED display (1,440-x-2,560, 565 PPI), 2.7GHz quad-core processor, 32 GB to 64 GB of internal storage, and a 21MP camera.

One of the most talked-about specs of the Verizon exclusive Droid Turbo is its battery life, as Motorola said the device can last for up to 48 hours on a single charge. Once depleted, it takes just 15 minutes of charging to get 8 hours of battery life.

Next: Motorola Deal Presents A Big Opportunity For Lenovo Partners

With Lenovo now holding the rights to devices such as the new Droid Turbo, Lenovo partners now see the Motorola buy as a great opportunity to sell the Motorola Mobility brand to enterprise customers.

"We were a Motorola partner before, and that partnership pretty much dried up when Google bought Motorola," said Douglas Grosfield, president and CEO of Xylotek Solutions, a Cambridge, Ontario-based solution provider and Lenovo partner. "Google isn't a channel-friendly organization, and there was no program for a partner like us to continue with them. When we look at the opportunity with regaining access to Motorola products through Lenovo, I think it'll definitely be an advantage for us. Lenovo is very effective at communicating with the partner channel and distribution world, and the value of the end customer. The Motorola product line under Lenovo will benefit. It will be more effective than it has been in the past."

Lenovo, the top PC vendor in the world, is already a big name in mobile internationally. Despite not being prevalent in the United States, the company was the fourth largest smartphone vendor with 5.2 percent worldwide market share prior to acquiring Motorola, according to IDC. After the buy was finalized last week, Lenovo has leaped over Xiaomi by gaining Motorola's 2.2 percent of worldwide sales, making Lenovo the third largest vendor in the world.

"This is absolutely a gateway for Lenovo to break into the mobile enterprise," said Grosfield. "Motorola has a long-standing reputation in the mobile space. It is hard to find a professional who hasn't carried a Motorola device at one point. If you look at their smartphones, they've come out with some strong products. I think they have a leg up on the competition in terms of their reputation in the enterprise space. Apple and Samsung both have a stranglehold on consumer markets, but Lenovo can leverage Motorola to gain some ground there."

PUBLISHED NOV. 6, 2014