An expensive mistake by Google could turn into a golden opportunity for China's Lenovo Group as it expands beyond its success in the personal computer industry.
Google is ridding itself of a financial headache by selling Motorola Mobility's smartphone business to Lenovo for £1.7 billion. The deal comes less than two years after Google bought Motorola Mobility for £7.5bn, in what was the biggest acquisition of the search giant's 15-year history.
While Google is backpedalling, Lenovo is gearing up for a major expansion. Already the world's largest maker of PCs, Lenovo is determined to become a big player in smartphones as more people rely on them instead of laptop and desktop computers to go online.
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Lenovo is already among the smartphone leaders in its home country, but has been looking for ways to expand its presence in other markets, especially the US and Latin America. The company was rumoured to be among the prospective buyers for BlackBerry when that company was mulling a sale last year.
"We will be going from an emerging market player to a worldwide player in smartphones," Lenovo chief executive Yang Yuanqing said.
This marks Lenovo's second high-profile deal this month. It announced plans last week to buy a major piece of IBM's computer server business for £1.4bn.
Google is holding on to more than 20,000 mobile patents, providing it with legal protection for its widely used Android software for smartphones and tablet computers.
Google recovered some of the money it spent on Motorola by selling its set-top operations to Arris Group for £1.42bn last year.