Menu
Lenovo leans on Motorola team to handle smartphone development

Lenovo leans on Motorola team to handle smartphone development

Lenovo is order a restructuring to revitalize its handset business

Lenovo's Motorola Mobility division will take over the company's smartphone development and manufacturing, as part of a reorganization that the company hopes will cut costs and revitalize its handset business.

The move will help the Chinese company produce better products, while taking the best from both Motorola Mobility and Lenovo, the head of its mobile business group, Chen Xudong, said Thursday in an open letter on Chinese messaging service Sina Weibo.

Last year, the company acquired Motorola Mobility for US$2.91 billion as a way to expand its handset business outside of China. But for Lenovo, the key challenge has been juggling the Motorola team with its existing smartphone operation, according to analysts.

So far the acquisition hasn't quite paid off. In the second quarter, Lenovo lost its place among the five largest smartphone vendors, said research firm Canalys.

In addition, the Motorola business is still posting a loss for Lenovo. So earlier this month, amid weakening earnings, Lenovo announced it would lay off 3,200 staff, in an attempt to streamline its business operations.

Some of those layoffs will target Lenovo's Motorola team. The cost of running that business is too high, and the company has vowed to make it profitable over the next few quarters.

With Motorola taking a larger role in phone development, Lenovo is aiming to create products that can better stand out, Chen said. On the sales side, the company will leverage Lenovo's existing distribution channels to promote the phones.

"We want to create profitable growth, not just simply expand our market share," he said. "A price war won't bring success."

The company, however, will continue using both the Lenovo and Motorola brands, Chen added. The Motorola team will also be in charge of Lenovo's smartwatch development.

The restructuring is a necessary move for the company, said Nicole Peng, an analyst with Canalys. Past Lenovo smartphone products, while not poor in quality or performance, have lacked a unifying design, she said.

"I think they need to come up with a design language that is unique," Peng added.

Lenovo might find some of that with its Motorola products, which have emphasized customizable covers for theirs phones, and using a more vanilla version of Android.

But earlier this month, Lenovo's CEO said the Motorola business would still need to make changes. This includes releasing products at a quicker pace, to ensure their specs remain competitive in the market.

"Whether Motorola will gain more power or importance, let's wait and see," Peng said. "There will be Lenovo people in that team, who will be responsible for sales and marketing."

Next month, Lenovo will be holding a product unveiling for a new Motorola device.


Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Featured

Slideshows

Kiwi channel comes together for another round of After Hours

Kiwi channel comes together for another round of After Hours

The channel came together for another round of After Hours, with a bumper crowd of distributors, vendors and partners descending on The Jefferson in Auckland. Photos by Maria Stefina.​

Kiwi channel comes together for another round of After Hours
Consegna comes to town with AWS cloud offerings launch in Auckland

Consegna comes to town with AWS cloud offerings launch in Auckland

Emerging start-up Consegna has officially launched its cloud offerings in the New Zealand market, through a kick-off event held at Seafarers Building in Auckland.​ Founded in June 2016, the Auckland-based business is backed by AWS and supported by a global team of cloud specialists, leveraging global managed services partnerships with Rackspace locally.

Consegna comes to town with AWS cloud offerings launch in Auckland
Veritas honours top performing trans-Tasman partners

Veritas honours top performing trans-Tasman partners

Veritas honoured its top performing partners across the channel in Australia and New Zealand, recognising innovation and excellence on both sides of the Tasman. Revealed under the Vivid lights in Sydney, Intalock claimed the coveted Partner of the Year 2017 (Pacific) award, with Data#3 acknowledged for 12 months of strong growth across the market. Meanwhile, Datacom took home the New Zealand honours, with Global Storage and Insentra winning service provider and consulting awards respectively. Dicker Data was recognised as the standout distributor of the year, while Hitachi Data Systems claimed the alliance partner award. Photos by Bob Seary.

Veritas honours top performing trans-Tasman partners
Show Comments