We'll Turn Motorola Profitable In A Few Quarters, Bring The Brand Back To China, Move 3500 Workers To Lenovo
The CEO of Lenovo claimed in a phone interview with Bloomberg that the company plans to turn Motorola profitable "in a few quarters" - primarily by shifting one of the brand's regional focal points back to China. Yang claims that Motorola will allow Lenovo to expand its already strong Chinese smartphone market presence at both the high and low end of the market, though it's unclear what this means for Lenovo's existing smartphone brand and, perhaps of more importance to you, Motorola's product strategy.
Motorola has been tracking consistently to lose over a billion dollars a year since Google purchased it, and that was after massive layoffs and restructuring at the company, including a nearly unilateral exit from non-US markets, at least until the Moto G launched late last year. Still, Motorola failed to make money, and Google spun off the property to Lenovo (sans most patents), presumably, because of the failure to improve that bottom line.
Lenovo has something of a reputation as a brand-saver, having purchased IBM's ailing ThinkPad division and turned it into a huge success in markets around the world. However, with PC sales ever-shrinking, Lenovo's smartphone business has had decidedly little traction outside the company's home country: China. Yang says the company will "relaunch" and "reintroduce" the Motorola brand to China and other emerging markets - presumably at the low end - while marketing high-end products elsewhere, most likely continuing Motorola's long-standing DROID partnership with Verizon in the US.
Yang's claims are certainly optimistic, but he doesn't seem to be wasting time: a full 3500 of Motorola's remaining employees will transition to Lenovo and become Lenovo employees, which means that much of the corporate culture and product strategy attributed to former Moto CEO Dennis Woodside will likely undergo major changes. Woodside announced this morning that he will be leaving the company. What this means for the future product pipeline, who knows (we do know Project Ara is now in Google's hands) - we could once again see Motorola stall launches while Lenovo reworks the brand. Let's hope it doesn't take them too long.