Google has bought a 5.94% stake in Lenovo worth around $750 million dollars. Given Google’s magnitude this acquisition is best served to them by helping Lenovo achieve its own ambitions. While Google is always big news it is Lenovo that seems to be gearing up to making waves in the industry.
Lenovo recently acquired IBM’s server hardware business for $2.3 billion dollars, to increase their clout. Being the largest PC company in the world since a previous IBM acquisition, they are set to increase their share in the server market.
In 2011, Google purchased Motorola Mobility for $11.9 billion but sold a section of it this year, including the brand and trademark, to Lenovo for $2.9 billion. Once again, though Google plays an integral part in the story, it is Lenovo that we should be keeping a watchful eye on.
What would a company do with server hardware, their current business of PC’s and Motorola Mobility? Diversify their sales and produce a lucrative, self-controlled and operated industry much like Samsung does. With production and manufacturing in their own hands, processes become efficient, heads come together and this provides a fertile ground for that ever elusive concept of true innovation (the one that really makes us go “Oooooo!” and “Aaaaah”).
When Google acquired YouTube and Launched Google+, the everyday consumer might have seen only the convenience of have one ID to log into multiple accounts. Scratch a little beneath the surface though and you will see that YouTube and Google+ are becoming the main building blocks for content promotion and brand building that the Google Search Engine also seems to love.
Acquisitions and partnerships are daunting to politicians and activists who are afraid of monopolies, but this should also be of concern to the average consumer who understands that this process sometimes involves price hikes in the future. Usually. However, given that much of what Google provides to online users is free and that many of their tech gadgets like the Nexus, are quite reasonably priced, they seem to have a different strategy in mind, maybe one that is mutually beneficial to both consumer and business. Lenovo on the other hand, does produce reasonably priced electronics that are of a high standard, however we just have to wait and see (far into the future) where they place price vs. quality.