After gobbling up Motorola, Lenovo becomes third-biggest smartphone maker

October 30, 2014, 8:51 PM UTC
Motorola Mobility/Lenovo Acquisition Day
CHICAGO, IL - OCTOBER 29: Motorola Mobility/Lenovo Acquisition Day on October 29, 2014 in Chicago, Illinois. (Photo by Timothy Hiatt/Getty Images for Motorola)
Photograph by Timothy Hiatt Getty Images for Motorola

Yesterday, research firm IDC said that Chinese company Xiaomi had become the world’s third largest smartphone maker. But the victory was short-lived.

Today, Chinese tech giant Lenovo leapfrogged ahead by finalizing its acquisition of Motorola from Google for $2.9 billion. The deal means that Lenovo, the world’s biggest PC maker, now ranks third in global smartphone market share.

Xiaomi, which is heralded as China’s “Apple,” shipped 17.3 million smartphones in the third quarter, according to IDC. Globally it had 5.3% of the smartphone market.

But by acquiring Motorola, Lenovo’s 5.2% marketshare jumps to 7.4%. At least, that’s if you combine their third quarter sales.

Lenovo still has a lot of ground to make up if it hopes to catch the companies ahead of it. Apple has a 12% market share while Samsung’s is 23.8%, according to IDC.

Coincidentally, 7.4% is the same market share Lenovo had in the personal computer market after acquiring IBM’s personal computer business in 2005. Today, Lenovo dominates the PC space with a 19.9% market share.

The Motorola acquisition had been winding through the usual closing and regulatory process since January. The combination immediately lifts Lenovo’s position in North America and Latin America while giving it access to Western Europe.

Google acquired Motorola in 2012 for $12.5 billion in hope of gaining traction in making and selling mobile devices. But consumers mostly stuck with buying from rivals, turning the acquisition into one of Google rare high-profile failures.

Although it sold Motorola at a loss of nearly $10 billion, Google still retains the rights to most of Motorola’s patents. Nevertheless, Lenovo gets around 2,000 patents in the deal and a license for several others.

“We want to be the number one smartphone maker on the planet,” said Brion Tingler, a Lenovo spokesman. “A lot of people are saying we can get to number one, just like we did with computers.”

Lenovo or Xiaomi, either way, China is in third place with aspirations of climbing higher.