Lenovo buys back mobile unit for $200m

Natalie Apostolou & Robert Clark
telecomasia.net

PC firm Lenovo is buying back its handset unit for approximately $200 million, twice what it sold the business for less than two years ago.

China’s largest PC-maker said Friday the deal was aimed at “gearing up its efforts” in China’s mobile internet market.
 
It will buy Lenovo Mobile Communication Technology from a group of investors led by Hony Capital, the private equity arm of parent Legend Holdings, for $200 million in cash and shares.
 
Under former CEO Bill Amelio, Lenovo sold off what was then a loss-making business for $100 million in January 2008, saying it would focus on its core PC business and allow the mobile group to operate independently.
 
It is now following rival PC-makers Dell, Acer and Apple into the mobile device market.
 
Since it was sold, Lenovo Mobile has maintained its position as China’s biggest domestic mobile brand, and no. 3 behind Nokia and Motorola, with around 6% market share.
 
It has also gone comfortably into the black. It recorded a 235 million yuan ($34.4m) pre-tax loss in 2007 and has since posted a pre-tax profit of 34 million yuan in 2008 and 40 million yuan in the first half of 2009.

Commentary

5G and data center-friendly network architectures

Matt Walker / MTN Consulting

Webscale and transmission network operators' interests are aligning as the 5G era dawns

Matt Walker / MTN Consulting

Webscale and transmission network operators' interests are aligning as the 5G era dawns

Rémy Pascal / Analysys Mason

The launch of 5G by South Korean operators serves as a first benchmark for other operators around the world