Lenovo Folds Mobile Group into Motorola Brand, Names Osterloh Boss
Lenovo confirmed it will fold its existing mobile business under the Motorola umbrella as part of a restructuring to emphasize the better-known brand, extend its market reach and maximize sales.
Rick Osterloh, who formerly headed Motorola Mobility before it was acquired by Lenovo last year for some $2.91 billion, will oversee the merged operation that includes Lenovo Mobile employees, the company told NDTV Gadgets. Motorola will handle all product design, development and manufacturing, Lenovo said.
Lenovo’s Mobile Business Group will continue to drive the vendor’s overall mobile business, leveraging the company’s global sales force, officials said. Whether Lenovo will retain the unit to continue to sell handsets in the China market is not clear.
“Effective immediately, Rick Osterloh, formerly president, Motorola, will be the leader of the combined global smartphone business unit, which will be under Motorola legal entities,” Lenovo said in an emailed statement. “MBG will continue to drive Lenovo’s overall mobile business, but will now rely on Motorola to design, develop and manufacture smartphone products.”
Here’s the full text of Lenovo’s statement, as provided to NDTV:
With tough markets and results that missed expectations, Lenovo is taking broad, decisive actions to realign businesses, cut costs and return to sustainable, profitable growth. Specifically, Lenovo is restructuring its Mobile Business Group (MBG) to align smartphone development, production and manufacturing and better leverage the complementary strengths of Lenovo and Motorola to quickly drive growth. To create a faster, leaner business model we will leverage our global sales force across Lenovo, and will accelerate the work already well underway to maximize efficiency in our global supply chain.
Lenovo’s new organization eliminates duplication, and positions us to compete as a strong player in the smartphone market. MBG will continue to drive Lenovo’s overall mobile business, but will now rely on Motorola to design, develop and manufacture smartphone products. Effective immediately, Rick Osterloh, formerly president, Motorola, will be the leader of the combined global smartphone business unit, which will be under Motorola legal entities. Osterloh will continue to report to Chen Xudong, senior vice president, and president, MBG.
Last month, Lenovo disclosed its plans to restructure its mobile business–paring its mobile lineup and featuring the more-recognizable Motorola brand–as part of a wider corporate overall to save some $850 million that also included some 3,200 layoffs.
Word first surfaced in early July that Lenovo might reorganize its mobile business unit following the appointment of company veteran Chen Xudong to run the division and chair Motorola Mobility.
The NDTV report also suggested that ZUK, the independent but Lenovo-backed startup selling affordable smartphones online against Xiaomi, Smartisan, Meizu and Huawei’s Honor line in the China market, will become Lenovo’s “flagship online brand.” Engadget reported, however, that ZUK said it is not part of the restructuring.
“No doubt ZUK will keep going (as is) in the future, because (it is) independent of Lenovo group,” a spokesperson said. ZUK recently released its first smartphone, the $280 Z1.
On the other hand, if Lenovo does rely on ZUK as its “flagship” in China, the company could fully shutter its Lenovo brand in favor of the internationally better-known Motorola.