Lenovo Reveals Motorola Integration Failed Expectations
Perhaps Motorola's "curse" continues. While many of Motorola's mobile devices, like the iconic RAZR or the Moto X, were well received, the company somewhat failed to become profitable. At least not long enough to stay put. Barely a few years after Google acquired it, Motorola was sold off again, this time to PC giant Lenovo. Now in its full-year fiscal report ending March 2016, the first fiscal year since it acquired Motorola, Lenovo candidly revealed that its integration of the mobile company fell below expectations, resulting in some losses though the general mobile business did grow as a whole.
It's not that Lenovo's mobile business is in trouble. It reported double digit growths in emerging markets of Asia Pacific, EMEA, and Latin America. Even in China, where analysts foresee the smartphone market stagnating, Lenovo saw a "robust" 63 percent growth. And Motorola even had a hand in that moderate success. Of the 10.9 million smartphones Lenovo shipped in the previous fiscal quarter, nearly 5 million were attributed to Motorola.
In the bigger picture, however, its integration of the Motorola into the fold did cost it much. That nice China number is actually an 85% decrease. Lenovo saw both Chinese and North American markets affected by the move. In China, Lenovo was moving to an "open market" business that sidestepped carriers for a more direct connection with customers. In North America, it regarded its transition of its brand to be not so successful.
That said, Lenovo perhaps believes in the adage "no regrets, only lessons learned". It is unfazed by those disappointing figures and is moving on to its next strategy. It is still pushing for an open market in China, especially with its new ZUK brand, which patterns its business after Xiaomi's direct consumer relations. As for the rest of the world, it will try to get back its US business back on track, perhaps leveraging the Motorola brand that is more familiar on that side of the world.
Lenovo is expected to announce in two weeks' time the first Moto X under its full ownership. Or rather, Moto Z as the leaks have it. It will definitely be an interesting launch to watch both from a mobile industry and a business perspective, as Lenovo tries to reclaim the prestige that Motorola has lost in the market.
SOURCE: Lenovo