Lenovo's Motorola business to produce phones at quicker pace, less cost

Lenovo announced it would cut 3,200 jobs in its businesses

Motorola wants to offer a pure Android experience with its phones in China.

Motorola wants to offer a pure Android experience with its phones in China.

In the wake of lackluster earnings, Lenovo said it is working towards pumping out products faster from its newly acquired Motorola Mobility division.

Lenovo wants the Motorola team to shorten its product development time, CEO Yang Yuanqing said in an earnings conference call Thursday. "By the end of the life cycle the product is not competitive, particularly the Moto G, the Moto X," he said.

Yang wants the company to update its smartphones and add new models every six months. "In the future we will improve our product development cycle. So in every moment our product will be competitive," he said.

Following a streamlining of the business, Lenovo will also create a simpler handset portfolio, with fewer models.

On Thursday, the Chinese company announced it would cut 3,200 jobs and restructure its mobile business, with the aim of creating a leaner operation that can better compete.

Motorola Mobility, which Lenovo acquired last year, will be among the business groups facing employee layoffs, company executives said. Lenovo paid US$2.9 billion for Motorola, but the business has been costly to run, and is still posting losses.

The company has vowed to turn around the Motorola operation in the next two to three quarters.

During the earnings call, Yang said the Motorola business takes $2 billion to run. However, Lenovo's own existing smartphone business costs only $400 million in expenses, yet ships about the same quantity of products.

"So that is way too high," Yang said of Motorola's business costs. "We think we can save $850 million after the restructuring."

Lenovo is making the changes as its faces tougher competition in the handset market. During the second quarter, its smartphone shipments grew 2.3 percent year over year, but its overall market share fell. Lenovo's rivals in China, including Xiaomi and Huawei, posted 29 and 48 percent growth, respectively, according to research firm IDC.

But even with the cost cutting, Lenovo is confident the restructuring will lead to robust smartphone growth over time. Yang said he wants his company to become the third largest smartphone vendor behind Samsung and Apple.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags smartphonesbusiness issuesAndroidLenovoconsumer electronicsrestructuringMotorola Mobility

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?