The merge has been in the works for about a year, according to Xiaomi Today. After it struck the deal with Google to acquire Motorola, Lenovo reportedly ran into problems with management and struggled with how best to operate both mobile divisions. It decided in the past month to merge Lenovo Mobile into Motorola, effectively giving all control of its mobile division over to the subsidiary.
Lenovo released disappointing financial results in the last quarter, with a $292 million loss and shipments down 0.5 percent to 16.2 million. Motorola showed strong growth with the Moto G and Moto E, alongside growing Moto X sales in the United States, which may have inspired Lenovo to hand the reigns over.
“The new organizational structure will be released immediately,” said Lenovo Mobile president Chen Xudong.
Most of the management positions will be given to Motorola executives, although they will continue to report to Lenovo CEO Yang Yuanqing, similar to the Google-Alphabet situation.
Lenovo’s high-end mobile brand Zuk will also merge into Motorola, even though the Zuk Z1 gained more than two million pre-orders. We expect Zuk will continue to sell devices online even with the change in management, as it competes against Xiaomi and OnePlus in the growing online-only market.
Under the control of Motorola, we expect to see a much smaller mobile portfolio from Lenovo. Lenovo may offer less smartphone options, but more customization. Lenovo will continue its brands in South-East Asia — where Moto devices have not gained major traction — but Motorola may be in control of deciding which brands continue selling and which brands get axed.
We have contacted Lenovo for comment on the report, and will update the article with a response.
