Lenovo’s Motorola Mobility division will take over the company’s smartphone development and manufacturing, as part of a reorganization that it hopes will cut costs and revitalize its handset business
Sourced through Scoop.it from: www.pcworld.com
Lenovo’s Motorola Mobility division will take over the company’s smartphone development and manufacturing, as part of a reorganization that the company hopes will cut costs and revitalize its handset business. The move will help the Chinese company produce better products, while taking the best from both Motorola Mobility and Lenovo, the head of its mobile business group, Chen Xudong, said Thursday in an open letter on Chinese messaging service Sina Weibo.
Last year, the company acquired Motorola Mobility for $2.91 billion as a way to expand its handset business outside of China. For Lenovo, the key challenge has been juggling the Motorola team with its existing smartphone operation, according to analysts. So far the acquisition hasn’t quite paid off. In the second quarter, Lenovo lost its place among the five largest smartphone vendors, said research firm Canalys. In addition, the Motorola business is still posting a loss for Lenovo. Earlier this month, amid weakening earnings, Lenovo announced it would lay off 3,200 staff, in an attempt to streamline its business operations. Some of those layoffs will target Lenovo’s Motorola team. The cost of running that business is too high, and the company has vowed to make it profitable over the next few quarters.