Lenovo calls back cell phone unit in re-acquisition deal
Monday, November 30th, 2009Chinese computer manufacturer Lenovo will pay $200 million to re-acquire its cell phone division, which was spun off into a separate company in 2008. The company said at the time that it wanted to focus on making PCs.
However, the burgeoning market for mobile devices and wireless phone applications appears to have tempted Lenovo back into the cell phone business, regardless of the $100 million hit that the company will have to take: When the wireless unit was sold last year, Lenovo only made $100 million on the deal.
The timing of the deal was unfortunate, according to experts. While the wireless division was clearly unprofitable at the time it was sold, Lenovo did the deal just before the recent global surge in smartphone sales began in earnest. The unit began turning a profit almost immediately after it was sold.
Lenovo is not the only traditional PC maker upping its profile in the mobile market. Texas-based PC manufacturer Dell announced earlier this fall that it would make and sell an O-Phone device in the Chinese market, using Google’s Android operating system.
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