Lenovo already has a stronghold on the phone business in China, where it specializes in entry-level handsets. So when the Chinese company shelled out $2.9 billion to buy Motorola Mobility we assumed its goal was to make a push in the U.S. market. That may be true, but in order to help Motorola make a profit, Lenovo says the best strategy is to sell its Moto phones in China as well.
Motorola saw an operating loss over over $1 billion last year, as its Moto X and Moto G phones failed to sell in large amounts despite earning glowing reviews from the press. This doesn’t concern Lenovo CEO Yang Yuanqing, who told Bloomberg it should only take “a few quarters” to turn around the struggling business.
“We will relaunch and reintroduce the Motorola brand back to China and other emerging markets,” Yang explained. “We will compete in the premium market, but this is not enough, we will also compete in the entry level.” That could mean a new market for the Moto G, or even more entry-level handsets.
Yang doesn’t specify whether that means releasing a new low-end Motorola smartphone or simply cutting profit margins on the Moto G and Moto X. Lenovo’s CEO also reveals his plan to transfer 3,500 of Motorola employees over to Lenovo, meaning several hundred staffers won’t be offered jobs. Motorola’s CEO Dennis Woodside has already announced his plans to leave for Dropbox, however, and we imagine more employees will follow suit before Lenovo’s deal with Google is finalized.
