Motorola is bringing a lot of mojo to Lenovo with its Moto line of phones. How much?
“Motorola,” declared Lenovo Chairman and CEO Yang Yuanqing, “will operate as an independent operation.”
In the name alone, Lenovo declared Thursday a new branding strategy from its many acquisitions over the years:
“Motorola: A Lenovo Company.”
So declares the new logo unveiled Thursday morning as Lenovo formally closed on the $2.9 billion acquisition of the former Google Motorola Mobility.
How times have changed since Lenovo bought IBM’s PC business a decade ago.
In a reflection of Lenovo’s own growth and international recognition, Yang and his management team did not embrace and license use of various marketing properties as they did in the IBM deal. Lenovo stands on its own as the world’s No. 1 PC manufacturer and is not the unknown it was outside China when pulling off the Big Blue deal.
And note that when Lenovo closed on the deal for IBM’s x86 server business ($2.1 billion), the IBMers were absorbed into Lenovo as part of a swelling server division based in the Triangle.
This deal is different, as well as larger at $2.9 billion.
With an overseeing board, Motorola is part of Lenovo and yet not. Its headquarters remains in Chicago, not Morrisville or Beijing – Lenovo’s HQs.
While Motorola Mobility employees now work for Lenovo, products remain separate. Names remain unique.
Yang noted that Lenovo “definitely will keep Lenovo products,” such as its Kobe Bryant phones and Yoga tablets promoted by Hollywood’s Ashton Kutcher.
And Motorola keeps its “Moto” line with Yang pointing out that Motorola’s history and reputation providing credibility to what Lenovo is trying to do.
Motorola brings increasing sales, its latest numbers helping lift Lenovo’s global market share to a strong No. 3 behind Samsung and Apple. The company also offers products in the U.S., North and Latin America and Wester Europe where Lenovo has steered clear of the smartphone wars.
But Yang acknowledged that branding of the combined company’s efforts “is the next phase.”
The Marketing View
Jeff Meredith, the Lenovo vice president for marketing in mobile devices and tablets who is based in Morrisville, talked about Lenovo’s strategy with WRAL TechWire after the deal-closing conference call.
“We are going to manage a dual-brand strategy,” explained Meredith.
“Motorola is an iconic brand known for leadership dating back to its Razer phone and before. Motorola has very positive brand attributes.
“We definitely are going to maintain the Moto brand going forward as the ONLY brand in the U.S. and Western Europe.”
Lenovo will “reinvigorate” Motorola, as Meredith described it. In recent months Motorola launched new products and increased sales as part of Google, Meredith acknowledged, and now Lenovo adds its weight. “The portfolio they have launched really set the stage for the reinvigoration,” he said.
Pressed about the possible mixing of messages – such as what’s Lenovo and what’s Motorola – Meredith said: ” really don’t see a downside to the integration. We will maintain two separate portfolios” with each relying on its own brand reputation and sales worldwide.
Each company keeps its own sales channels as well as management.
However, the companies will explore synergies and cost savings in other areas such as supply chain and support, Meredith said, echoing earlier comments made by Yang. “There will be a lot of consolidation on the back end,” Meredith said.
Advances in Technology?
So what happens if Lenovo phone engineers make a breakthrough? Will that be shared with Motorola engineers? And vice versa?
“Clearly, we are all one company,” Meredith replied. “We are all under the Lenovo Mobile Business Unit. So as of today we are one team.”
Liu Jun, president of the Lenovo Mobile Business Group, will serve as chairman of the Motorola Management Board.
Rick Osterloh, president and COO of Motorola Mobility, will oversee the group as part of Lenovo.
While “it’s pretty early to speculate,” Meredith also said he didn’t see the deal producing much in the way of additional jobs for Lenovo in Morrisville.
But he did say Motorola and Lenovo execs such as himself are going to racking up a lot of frequent flier miles between the Triangle, Chicago and Motorola’s big outpost in California.