Lenovo hands smartphone creation to Motorola
The Motorola Mobility division of Lenovo will take possession of the company’s smartphone manufacturing and development, as part of a restructuring that the company hopes will cut costs and refresh its handset business.
Chen Xudong, who is the head of its mobile business group, said on Thursday in an open letter that the move will assist the Chinese company to manufacture better products, while taking the best from both Lenovo and Motorola Mobility.
The previous year, the company developed Motorola Mobility for $2.91 billion as a way to enlarge its handset business outside China. But for Lenovo, the most important challenge has been juggling the Motorola team with its present smartphone operation, according to a specialist.
So far the achievement has not quite paid off. In the second quarter, Lenovo lost its place among the five largest smartphone sellers.
Furthermore, the Motorola business is still stationing a loss for Lenovo. So previously this month, among weakening earnings, Lenovo declared that it would dismiss 3,200 staff, in an attempt to streamline its business operations.
Some of those layoffs will aim at the Lenovo’s team of Motorola. The cost of running that business is much too high, and the company has sworn to make it profitable over the next few quarters.
Chen said that with Motorola taking a larger part in phone development, Lenovo is targeting to make products that can better stand out. On the sales side, the company will influence the existing distribution of Lenovo channels to support the phones.
He further said that they wish to create profitable growth, not only expand their market share. He added that a price war will not bring victory.
The company, though, will stay using both the Motorola and Lenovo brands, Chen added. The Motorola team will also control the development of smartwatch by Lenovo.
Nicole Peng, who is an analyst, said that the reformation is an essential move for the company. She added that the Lenovo smartphone products of the past, while not poor in performance or quality, have lacked a uniting design.
Peng further added that she thinks that they need to turn up with a design language that is unique.
Lenovo might find some of this with its Motorola products, which have stressed customizable covers for theirs phones, and using a more vanilla version of Android.
But previously this month, CEO of Lenovo said that the Motorola business would still require making changes. This comprises of launching products at a faster speed, to make sure their specs remain competitive in the market.
Peng said that whether Motorola will gain more importance or power, this we will have to wait and find out. She added that there will be Lenovo people on that team, who will be in charge of sales and marketing.
Next month, Lenovo will be holding a product introduction for a new Motorola device.
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