Fantastic story reveals a 2003 deal that would have completely changed today's smartphone industry

Fantastic story reveals a 2003 deal that would have completely changed today's smartphone industry
The whole smartphone market would look differently today had Motorola and Huawei followed through on a deal that was agreed to by both parties back in 2003. A letter of intent signed by both companies late in 2003 called for the acquisition of Huawei by Motorola for $7.5 billion. This amazing story was published today in The Financial Times, and includes a photo of then Motorola Chief Operating Officer Mike Zafirovski, and the head of the firm's Chinese business, Larry Cheng, walking on a beach in China with Huawei founder Ren Zhengfei. Ren was just 49 when the photo was snapped.

This deal had never been revealed before today, and at the time Motorola was only interested in Huawei for its networking equipment business. Products like the Mate 20 Pro were still another 15 years away. The Motorola DROID was still six years away, although the company's huge selling RAZR flip phone was less than a year from launching. Even back then, Huawei was associated with quality as Motorola's Zafirovski discovered when he spoke with friends at Emerson Electric. The executive thought that with this deal, Motorola could turn 1+1 into 5.

After Zafirovsky was passed over for the CEO spot at Motorola, the deal was killed because of the U.S. company's unwillingness to pay what was seen as a high price for an unknown foreign firm. In addition, terms of the deal would have required Motorola to pay most of the cost of acquiring Huawei upfront. At the time, the Chinese government wasn't supporting Huawei. This didn't take place until the company became an international success story.

As we now know, Motorola ended up selling more than 130 million RAZRs, and kicked off Androidmania when it released the DROID in November 2009. The company was sold to Google for $12.5 billion in 2011, and then to Lenovo less than three years later. Huawei took in $108.5 billion in revenue last year, and besides being the second largest smartphone manufacturer globally, it is now the largest networking equipment supplier in the world.

We will never know what would have been had the deal been consummated, but one senior Motorola executive in Hong Kong said, "It isn’t clear whether Huawei could have saved Motorola or Motorola would ultimately have destroyed Huawei."

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8 Comments

1. yobolegend

Posts: 53; Member since: Sep 14, 2016

Things happen the unexpected way Either for better or worse

4. Cat97

Posts: 1942; Member since: Mar 02, 2017

Yes, and 1+1=2.

5. TheOracle1

Posts: 2340; Member since: May 04, 2015

US corporate culture, regulations and oversight would have throttled them. I'm not saying US corporate culture is necessarily bad, but it's burdensome for growing companies. A perfect example of that was when jobs left Apple and the former PepsiCo (I think) ceo took over. He almost drove it into the ground with his Wall Street approach.

6. RoryBreaker

Posts: 239; Member since: Oct 11, 2015

Like Tim Cook might ultimately do.

2. antroid

Posts: 392; Member since: Jan 24, 2018

That's sounds better for April's fools day. It's crazy how things came ended up after 15 years.

3. Bobbii

Posts: 43; Member since: Jan 18, 2017

Motorola refused to acquire Huawei because of Huawei CEO's bad dress sense.

7. Nimbus

Posts: 442; Member since: Apr 02, 2018

Then Motorola would have been the largest networking equipment suppliers in US or worldwide and 2nd or 3rd largest smartphone manufacturer in the world after Samsung and US owned fruit company craapple there would been only zte,one+/oppo,vivo and xiaomi in China no existance of huawei.Btw nice article on this rare topic info only after 15 years of smartphones revolution and evolution and still going on constantly.

8. vasra

Posts: 130; Member since: Feb 27, 2014

Makes no difference. Motorola and the US management would have totally spoiled the deal anyway. The future is in Asia: China, India, Pakistan, Malaysia, Indonesia, Vietnam, Thailand - with Korea and Japan lagging behind.

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