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.
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