After acquiring Motorola Mobility, Lenovo's mobile division is being taken into the Moto banner
According to a report published yesterday on XiaomiToday, Motorola is all set to absorb Lenovo’s mobile division. While that sounds a bit confusing at first, considering that Motorola is owned by Lenovo after being acquired from Google in 2014, on closer inspection it does make a lot of business sense. Talks of a merger had been floating for a while now, and now it looks all set to materialize. Under the new arrangement, Lenovo Mobile will cease to exist, with Motorola taking charge, and all subsequent devices will be released under the Motorola branding.
The report suggested that the the merger of Lenovo Mobile with Motorola Mobility had been in the pipeline for about a year now. After figuring out the best way to merge the companies, a concensus has finally been reached. In an interview to Interfaces News, Lenovo Mobile president Chen Xudong said, “the new organizational structure will be immediately released.” Although Lenovo CEO Yang Yuanqing will still be at the helm of affairs, Motorola’s management structure will lead the merged entity. Lenovo Mobile will gradually scale down the production of its own models until all new devices are released under the Motorola brand. It has also been suggested that Motorola may follow a dual-brand strategy with regards to the ZUK brand. It might the ZUK branding will be used to market the devices in Asian markets online, while using the Motorola branding in other markets.
When Google acquired Motorola Mobility in 2011, its finances were in dire straits. Google benefitted from Motorola’s patents and advanced research projects. Motorola, with the backing of the search engine giant, scripted a remarkable comeback with the Moto G. But, it was sold to Lenovo last year which took many by surprise. And now, the merger seems a strategic move which will allow Lenovo to expand to markets beyond Asia. Although a major player in the Asian market, few people in the Western territories are aware of Lenovo’s smartphone business. Lenovo will be looking to harness Motorola’s image in those markets to sell its devices.
It must be mentioned here that all of this is based on a single report that appeared on XiaomiToday. We have reached out to Lenovo for a comment, and this was their reply:
As communicated in our recent Q1 FY1516 earnings, to create a faster, leaner business model, we will align our smartphone development, production and manufacturing and better leverage the complementary strengths of Lenovo and Motorola to quickly drive growth. Lenovo’s Mobile Business Group (MBG) will continue to drive the overall mobile business, but will now rely on Motorola to design, develop and manufacture smartphone products. Both Motorola and Lenovo brands will remain in the market currently, and we are excited about our latest product announcements such as the Lenovo VIBE Shot which we are currently launching.
We had also asked whether Lenovo will be merging Motorola smartphones into a single brand under Motorola at any point, to which Lenovo said, "Both Motorola and Lenovo brands will remain in the market currently. Long term branding decisions are still in discussion."
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