Wednesday, October 23, 2013

BlackBerry Deal Would Be a Risk for Lenovo


Lenovo, a Chinese Computer maker is at risk after news of sealing a non-disclosure agreement to check BlackBerry smart phone company for a potential acquisition. This agreement aimed at improving market shares for the computer company in the stock market but contrary Lenovo’s shares significantly depreciated after signing this agreement. Investors turned their focus to the Smart phone’s ratings in the stock market. Blackberry’s shares in the market are low because consumers are not popular with its services and products as well, a demoralized workforce and a decreasing client base. In countries such as China, Lenovo sells large amounts of smart phones and it hoped to widen customer base when it signed the agreement. This move could be disadvantageous to Lenovo as the Blackberry brand has depreciated worldwide even in its stronghold of North America. This would mean Lenovo’s main objective of expansion In North America will not be achievable in the short run and this deal demoralizes investors as displayed by share dip after announcement of a potential acquisition. Additionally, Blackberries technological patents are aging and its lower client decreases the manufacturing capabilities is a drawback to Lenovo.

3 comments:

  1. There is advantage of this scenario, Lenovo need to has reputation, not everyone know about Lenovo. This opportunity give it good reputation out of china because of Blackberry known as high secure level and tell its future customers we are bigger than blackberry. That is mean, trust us and try our products.

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