Posted by: Bruce Einhorn on April 12, 2010
Now that Chinese automaker Geely has agreed to purchase Volvo from Ford, will Palm be the next downtrodden Western brand to be swooped up by a Chinese buyer? That’s a possibility now that the creator of the Pre smartphone is, according to this Bloomberg News story and other news reports, seeking bids for the company. As they speculate about would-be buyers, analysts point to several companies from China that might want to grab the U.S. company as a way to jump-start their smartphone sales. Lenovo, the PC maker that has gotten back into the phone business in January after a two-year absence, is one. Huawei and ZTE, the two biggest Chinese makers of phone equipment, might also be interested.
Good luck with that. I’ve written before about the spotty track record of Chinese companies trying to grow globally through M&A. The best of the lot so far has been Lenovo’s purchase of IBM’s PC division in 2005 – and that’s not saying much. Lenovo is No. 4, behind market leader HP, Acer and Dell, and its global market share in the fourth quarter of 2009 was a respectable 8.9%. That’s thanks largely to Lenovo’s commanding position (33.5% market share) in its home market, though, something that the company didn’t need the IBM deal to achieve. Meanwhile, in the market where the acquisition should have helped the most – the U.S. – the company’s sales have slumped. Something to keep in mind in the days ahead as we hear more about the likelihood of a Chinese company trying to leapfrog to the top tier of the smartphone business by buying Palm.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.