13
Feb
Moto

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.

Bloomberg

David Ruddock
David's phone is an HTC One. He is an avid writer, and enjoys playing devil's advocate in editorials, imparting a legal perspective on tech news, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • TheUndertaker21

    really ?

  • Michael Tran

    I guess the Made in the USA and the factories in Ft Worth are going away? :(

    • American

      Assembled. Not "Made".

      • Carla John

        Moto was our last hope for a consistent string of stock Android devices with updates in the pipeline.

      • Wanji Lai

        Bye bye Samsung.

    • http://www.androidpolice.com/ David Ruddock

      Motorola does not own or operate the factories, they're run by a 3rd party company.

      • Michael Tran

        That's encouraging. Thanks for the correction

      • American Patriot

        Schaumberg, Ill. is run by Motorola, supporting their land mobile radio operations and software platforms for radios like the CDM, XTS, Astro Spectra and XTL line, to name a few.

    • AbbyZFresh

      Lenovo has a plant in North Carolina. They'll be fine.

  • h4rr4r

    The Moto X is a great device, but I guess we can forget about this now.
    So sad.

    • numpty

      Why?It'll still work as well in a year as it does today.

      • h4rr4r

        Which makes it pointless. An android phone without updates is worthless.
        The whole high quality build will go to crap at least for a few years. See what they did to the Thinkpad T line. They let it get to the point were dell build quality was better for years before they noticed they market share slipping and did something about it.

  • MotoIsDead

    Thanks Google for ruining a once proud American company...

    • http://emuneee.com Evan

      No, Motorola ruined a once proud American company.

      • Justin W

        Then Google ruined it by selling them to China.

        • Derek Duncan

          Or have Google continue to lose billions.. Easy decision if not your money.

          • Robert Boluyt

            I think if Motorola had continued turning in devices like the the Moto X and Moto G, they'd hit profitably before too long. Now, its all on hold while we figure out what Lenovo is going to do.

    • efw

      American company? Oh, you mean their CEO sits in America.

  • blix247

    I think it was never Google's idea to rebuild Motorola and turn it into a Google brand. By their own admission it takes 18 months to clear a product pipeline, so they weren't even a year in with their official "Google" strategy. What they managed to do in that short time was create the best phone I've ever owned. I think a few more years of building on that strategy would have resulted in significant market share gains.

    We might get one true successor to the Moto X but that will be it. After that Lenovo will have drained all the creativity from the company.

  • ithehappy

    Whatever Lenovo is gonna with Moto will be way better than Google anyway.

  • Matthew Fry

    Maybe this is why he left...

  • z32588

    It's going to be interesting, but I think Android enthusiasts such as myself are clinging to false hopes if we think Lenovo will keep a stock Android look or maintain what was basically a Nexus line.

    It's a shame because a lot of us are stuck on Verizon. Moto was our last hope for a consistent string of stock Android devices with updates in the pipeline. Like with the OG Droid - Motorola teased us again! I 'm going to holding on to my MotoX for a long time.

  • WhyWai

    Bring Moto back to China? And I though Lenovo is already a pretty reputable brand in China, Moto is for international market. Why they need 2 brand in China alone...

    • Rb

      "Moto is for international market."
      No, Moto like Apple, has only been popular in the US. The Razr is the only Moto phone that ever made a name outside the States. But Americans like to make a big deal about things. Same reason they think American "football" events are watched worldwide.

      • numpty

        Half of Apple's sales are from outside the US.Hardly unpopular.

        • Cerberus_tm

          Apple's market share is large in America and Japan, but tiny almost everywhere else, including most importantly Europe and China.

          • LP

            Gee...it's no wonder why Apple is the most profitable of all the other mobile phone manufacturers, including Samsung that spent $14 billion dollars on marketing last year and has vessel containers and washing machines in their portfolio. Marketshare does not equal profitshare.

          • Cerberus_tm

            Appe made about half of all smartphone profits last year, according to some sources, and Samsung most of the rest of the smartphone profits. Apple's share in smartphone profits has been declining steadily, according to this source. But I believe there are other sources who claim differently: perhaps the real figures are just not well known? Oh, and Samsung's washing machines etc. are completely separate from this.
            http://appleinsider.com/articles/13/07/31/apple-takes-53-of-smartphone-profits-samsung-at-50-remainder-lose-money

          • LP

            Actually, Apple made more than half. And, the article you cite shows results from 2nd Q 2013, not the whole year! If you look at 4th Q 2013, Apple took 87.4% of all smartphone profits!

            http://www.electronista.com/articles/14/02/11/including.losses.from.others.samsung.and.apple.take.120.percent/

            Declining steadily? I think you need some new sources.

          • Cerberus_tm

            I've read that source as well, it is one of my "other sources". But just look at the huge discrepancy between the two sources: is it likely that Apple declined and declined all through 2013 Q2, then suddenly surged upwards to 87 % from 53 %? No, I think one source or most must be wrong. And the source I gave actually refers to an underlying source, while yours only refers to a certain analyst. And my source seems to have more data, what with the table and all. But, actually, it seems equally likely that neither source has it right, and that nobody really knows...

          • LP

            You are misreading the data. The profit share percentages are just for those quarters only, not for the whole year. Yes, Apple took 87% for Q4 (mainly because of the iPhone holiday sales of 51 million), but it doesn't mean for the whole year and I never made that claim. What I'm saying is that you took results from one quarter and claimed that it was the profit-share for the whole year...and that was incorrect. The percentages don't carry over...each quarter is its own discrete entity. And you made the claim that Apple's profit share was on a steady decline but they took 87.4% of the profits Q4! So...yes..it is possible to have 53% one quarter...then 87% for another quarter.

          • Cerberus_tm

            Okay, fair enough, that "half" wasn't about all of last year, but only about the first half of last year. It is possible that the 4th quarter was more, but so much more? Lots of other manufacturers also launched new phones then. I see a discrepancy. And, considering that Apple's market share has been in decline for a while, it only makes sense to expect their share of the profits to decline as well, considering that they are facing tough competition in the higher segments (hence the "cheaper" Iphone 5C of last year).

      • Rickin

        Moto X and Moto G are pretty popular here in Brazil

      • Cerberus_tm

        Football? I thought didn't have that, only some form of rugby?

  • American Patriot

    I have a feeling that Lenovo will close down the U.S side of assembly and manufacturing (if any) and relocate back to China or another Foxconn subsidiary. I hope they don't mess with any U.S located operations, but I bet they will, closing 'our' doors while hurting jobs.
    If Motorola (Lenovo) does this, I will change my business and no longer service Motorola radio systems, as a personal means to voice my opposition, I choose to voice it with the greatest of all voices, the money!

    • contriver87

      Motorola Mobility != Motorola Solutions. Motorola Solutions makes those radios and since they were split it is an entirely different company from the one sold to Lenovo.

  • Chris Anakor

    At least Motorola won't be restricted to Android. Under Lenovo, Motorola can make devices for other mobile OSes.