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A new report suggests that Lenovo has been in talks to acquire HTC in a deal which might be completed before the first half of 2014. Owing to the Taiwanese company's supply bottlenecks, patent infringement cases, weak flagship handset sales, its no surprise that HTC has been having a very, very bad year. A week ago, it reported a third quarter loss and even went on to sell of its stake in the Beats Audio business for a $265 million cash injection.
The acquisition, if materialized, will be a smart move for both companies, as it will allow for an exchange of resources and expertise between a rookie and a top contender. Lenovo could benefit from HTC's solid brand image in the market and also make the most from the company's expansive fan base.
Once a powerful player in the smartphone market, HTC has been facing some serious trouble in recent times. It posted a quarterly loss of $120 million last week as its sales tumbled by a third when compared to the previous year. The bad financial results come despite numerous excellent reviews of the HTC One handset from the tech community.
Talking about Lenovo, the company has been trying hard to make its presence felt in the exploding smartphone market. In fact, it has understood that it is easier to buy a brand instead of building one. There have been rumors that the company was also eying Blackberry a few months ago. The reasong being that the Canadian company, despite being a poor performer in recent times, has a solid enterprise customer base.
Currently, Lenovo is a strong player in the Chinese smartphone market. When ranked internationally by IDC, the company comes in at Third place after Samsung and Apple.