Lenovo Breathes New Life into Motorola

by Matt Klassen on February 11, 2015

Lenovo has found a way to breathe new life into its Motorola Mobility subsidiary, finding success where others have only found failure. In fact, since Motorola Mobility was spun off into its own company in 2011, the American mobile brand has seen nothing but struggles, unable to make it on its own and serving as nothing but dead weight for Google. But under the leadership of Lenovo Motorola is quickly on its way back to profitability, contributing to Lenovo’s strong gains in a mobile market where most other major players saw losses or little growth this most recent quarter.

Earlier this month Lenovo reported Motorola sold 10 million handsets in Q4 of 2014, a 118 percent increase over the year previous. The Chinese PC firm also announced that Motorola is “estimated to be 12-18 months from profitability,” building on the $1.9 billion in revenue it accrued last year.

This certainly is a far cry from the hollow shell of a company we saw under the leadership of Google, which begs the question, what is Lenovo doing differently? Motorola stands as one of several mobile brands controlled by Lenovo, so it’s not that the company has given it considerably more attention, which means the real difference may in fact be between Lenovo and Google, as the latter constantly had to worry about appeasing the Android ecosystem while the former is free to grow Motorola however it sees fit.

Shortly after Motorola Inc. was spun off into two companies in 2011, Google acquired the newly formed Motorola Mobility for a cool $12 billion. At the time the acquisition was widely questioned, given that Google was now directly competing with other hardware vendors who were, in fact, the lifeblood of Google’s Android empire.

The results were predictably horrid, as Google virtually gutted the company as Motorola wrung up several consecutive major quarterly losses. In fact, under Google Motorola became virtually irrelevant in the mobile market, amidst rumours that Google CEO kept Motorola and its Android department at arms length in an effort to keep other Android partners happy, effectively hamstringing its own mobile brand.

So in 2014 Google finally cut Motorola loose, selling the firm to Lenovo was a relatively paltry $2.91 billion. In a relatively short period of time Lenovo seems to have turned the Motorola brand around, forced to rebuild the company almost from the ground up after Google’s successive rounds of “streamlining,” where thousands of jobs were cut.

Now Lenovo is poised to reintroduce Motorola into the Chinese market, one where the PC maker already has several other mobile brands in the market. It will be part of the company’s approach to capturing a significant share of this lucrative mobile space, and I wouldn’t be at all surprised if in a two or three years we’re talking about Lenovo capturing the top spot in the global smartphone industry.

So how has Lenovo found success with Motorola where all others have only found failure? While truthfully the acquisition is still in its infancy I think the early evidence is that Lenovo has the freedom to grow the Motorola brand that Google never had, that is if Google ever really wanted to grow the Motorola brand to start with.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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