Lenovo still struggling with its three-year old Motorola acquisition
Around three years ago, Google made a then surprising decision to sell off Motorola Mobility just two years after Google themselves acquired the company for 12.5 billion USD. The search engine giant was not successful in establishing Motorola as a profitable arm in the smartphone market and Chinese manufacturer Lenovo decided to pick up the company instead in an attempt to reach out to Western markets. Lenovo smartphones are largely available only in Asian territories as cheaper alternatives to Apple and Samsung devices while having limited presence overseas.
Now that three years have passed under the guidance of Lenovo, the Motorola acquisition has grown stale in terms of overall sales. The combined worldwide sales of Lenovo and Motorola smartphones don't even come close to Samsung or Apple and profits have been in the red thus far. Lenovo's smartphone business, for example, has been costing the company more than 100 million USD every quarter.
Is there a Motorola curse in effect? According to The Wall Street Journal, Lenovo had expected to turn Motorola into a booming business not unlike the company's acquisition of IBM years before. This way of thinking has led to several strategic failures including an attempt to bring the Motorola brand to China where Lenovo's own smartphone brand was already collapsing to rising competitors. Lenovo's market share in its home territory, for example, has fallen from 12 percent to just 2 percent. Further, Motorola's market penetration in North America has not been a success due to a lack of marketing.
The number of employees working for Motorola Mobility has been dropping ever since and even Lenovo CEO Yang Yuanqing has admitted that he had underestimated the cultural and structural differences between Lenovo and the American-based Motorola company.
Lenovo is expected to unveil new Motorola devices at this year's MWC in what will likely be yet another attempt at cracking the smartphone market.
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