After reports emerged last night about Lenovo merging its smartphone business into Motorola, the company has issued a clarification about what’s really happening. For now, the two brands – Lenovo and Motorola – will continue to co-exist in the smartphone space, according to Lenovo.
“Both Motorola and Lenovo brands will remain in the market currently, and we are excited about our latest product announcements such as the Lenovo VIBE Shot which we are currently launching,” Lenovo said in a statement emailed to BGR India.
In its quarterly earnings Lenovo had announced that Motorola will design, develop and manufacture smartphones for Lenovo as well. However, Lenovo hasn’t officially announced that Lenovo’s smartphone business has been merged into Motorola.
“Both Motorola and Lenovo brands will remain in the market currently. Long term branding decisions are still in discussion,” the statement added. The company denied to comment on the current status of the situation. However, media reports suggest that Lenovo’s mobile business group would be merged into Motorola.
“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,” Lenovo had said in a statement issued to NDTV Gadgets.
Lenovo did not comment on the above statement about Lenovo’s mobile business group getting merged into Motorola.
“As communicated in our recent Q1 FY1516 earnings, to create a faster, leaner business model, we will align our smartphone development, production and manufacturing and better leverage the complementary strengths of Lenovo and Motorola to quickly drive growth. Lenovo’s Mobile Business Group (MBG) will continue to drive the overall mobile business, but will now rely on Motorola to design, develop and manufacture smartphone products,” Lenovo said in the statement issued to BGR India.
Update: Sources confirm to BGR India that Rick Osterloh would be leading the mobile business group, which will be merged into Motorola.
However, what remains to be seen is how the branding strategy is implemented, considering Motorola would be developing the product roadmap and will also design and manufacture the smartphones for both the brands. It remains to be seen whether the same devices get branded under both Motorola and Lenovo depending on the market and the brand value. However, thinking about long term, we don’t think it makes sense to have multiple brands in the same portfolio, considering it would duplicate marketing expenses apart from other expenses.