Lenovo starts merger of mobile unit with Motorola

Lenovo has initiated the merger of its mobile unit with Motorola, which the Chinese brand acquired last year from Google for $2.91 billion.

China-based website Xiaomi Today reported that Lenovo's mobile unit is now becoming part of Motorola and both brands would now be run as a single entity in global markets.

A Motorola India spokesperson told the media that in the new setup, current Motorola president Rick Osterloh would be responsible for the two brands, and would report to Lenovo's top brass.

Lenovo India said in a statement, "As communicated in our recent Q1 FY15-16 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. 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."
 
"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," according to an emailed statement sent by a Lenovo representative to NDTV Gadgets yesterday.

"MBG will continue to drive Lenovo's overall mobile business, but will now rely on Motorola to design, develop and manufacture smartphone products," the statement added.

Lenovo Mobile would go through a restructuring which would affect the product line as also its brand, Lenovo Mobile Group president Chen Xudong had been earlier reported as saying.

Lenovo acquired Motorola from Google in 2014 and as part of the buyout, Google continued to maintain ownership of a majority of Motorola Mobility patent portfolio. Motorola, on its part  got to retail over 2,000 patents, as also a number of cross-license agreements.

It has not been clear ever since the buyout how exactly Lenovo planned to handle both the companies. It was not uncommon to see companies merging divisions, the merger usually helped a company significantly reduce the time it took in managerial processes.
 
Lenovo, which owns the Motorola smart phone brand, started local assembly of the phones last month through contract manufacturer Flextronics' facility near Chennai, bringing its production base nearer to Indian consumers. (See: Lenovo to make six mn handsets in India).