10 Things Lenovo Must Do to Get Motorola Back on Track

 
 
By Don Reisinger  |  Posted 2014-01-31 Email Print this article Print
 
 
 
 
 
 
 
 

Lenovo and Google stunned the technology industry recently after announcing that the search company would sell off its Motorola handset business to Lenovo for $2.9 billion. The sale is a substantial discount from the $12.5 billion Google paid for Motorola in 2012. It also shows just how far Lenovo has come as a brand that wants to do even bigger things in the United States. In order for Lenovo to succeed, however, the company must make a number of changes at its newly acquired Motorola unit. Lenovo has been able to build its PC operation into a global leader through the strength of its brand recognition and its willingness to go the extra mile on design and security. But trying to turn Motorola once again into a dominant mobile device brand won't be simple. Lenovo needs to understand that the U.S. Android ecosystem it'll be playing in is nothing like those other markets in which it's already competing. This slide show will examine the deal, some market factors and identify some things Lenovo should do to nurture Motorola under its wing. Believe it or not, the answers go beyond just selling more handsets.

 
 
 
  • 10 Things Lenovo Must Do to Get Motorola Back on Track

    by Don Reisinger
    1 - 10 Things Lenovo Must Do to Get Motorola Back on Track
  • Keep the Motorola Branding

    Lenovo has already said that it will maintain the Motorola branding when the deal is completed. That's a smart move. In the United States, Motorola is still one of the top smartphone makers and is viewed somewhat favorably by consumers, according to recent studies on attitudes toward mobile brands. If Lenovo ditched the brand, it would have an exceedingly difficult time breaking into a tight U.S. market.
    2 - Keep the Motorola Branding
  • Get Ready to Spend Cash

    While some believe that Lenovo got off easy paying only $2.9 billion for Motorola, the company should fully expect to spend plenty of cash in the coming months to get the company on track. Motorola's business is losing money as Apple and Samsung continue to sell mobile devices at a rapid pace. The only thing Lenovo can do to change that is spend money on research and development, marketing and public relations initiatives aimed at improving Motorola's standing in the marketplace. Absent all that, it's hard to see Motorola's luck changing any time soon.
    3 - Get Ready to Spend Cash
  • Look to the Enterprise

    If Lenovo understands anything, it's how to appeal to the enterprise. That's precisely why the company should consider whether more of its products could find a home in the corporate world. Motorola tried such a move with devices like the Admiral, but it appears the company doesn't "get" the corporate world. Lenovo does. And the company should use Motorola to help further its infiltration into that space.
    4 - Look to the Enterprise
  • Stick With the Dual Branding

    One of the core aspects of Lenovo's chances of success in the coming years will be its willingness and ability to successfully complete a dual-branding strategy. In Asia, the Lenovo brand is well-respected in the mobile space. In the United States, it's still viewed solely as a PC maker. The last thing Lenovo should do is roll up its mobile efforts into a single brand. Such an idea could cause all kinds of trouble internationally and in the United States.
    5 - Stick With the Dual Branding
  • Leverage Motorola's Talent

    Part of the value of acquiring Motorola for Lenovo is gaining access to its talent. Motorola has for years been building high-quality devices, and Lenovo can use that both in the United States and internationally. Lenovo has done a fine job of building mobile products so far, but Motorola's high-valued talent—something that Google cited when it acquired the company in 2012—should help Lenovo reach new heights in product design.
    6 - Leverage Motorola's Talent
  • Solidify Those Carrier Relationships

    In a conference call Jan. 30, Lenovo CEO Yang Yuanqing said that a key component in the Motorola deal is that his company will have relationships now with over 50 wireless carriers. That's a very important asset. Strong carrier relationships represent the difference between success and failure in mobile. Luckily for Lenovo, Motorola has strong carrier relationships. That should make it easier for Lenovo to get its product strong placement on store shelves—a key component in gaining market share.
    7 - Solidify Those Carrier Relationships
  • Remember: Google Is an Owner

    An interesting part of the deal between Google and Lenovo is that the search company will own a slice of the PC maker. In fact, at the time of the deal's closing, Google will own $750 million in Lenovo stock. That should help Lenovo with its Android efforts, and it'd be a good idea for the company to stay as close to Google as possible. After all, Google is the Android gatekeeper.
    8 - Remember: Google Is an Owner
  • Patent Royalties Might Help

    Although Lenovo is not getting all of Motorola's patents in one lump sum, the company will get 2,000 right off the bat. It's not clear which patents are included in that transfer, but it'd be instructive for Lenovo to evaluate what it's been given and find ways to maximize royalties through those. Patent royalties are one of the easiest ways to get money back on a big transaction.
    9 - Patent Royalties Might Help
  • Ignore Apple

    If Lenovo wants to be successful in the U.S. smartphone market, the company must absolutely ignore everything Apple does. The smartphone market is riddled with the remains of companies that have tried to be like Apple and failed. Lenovo needs to find its own lane—like Samsung with its larger mobile devices and stylus—to appeal to customers in new ways. There's no way Lenovo will beat Apple on individual device sales, so why should the company try to make the iPhone maker its top priority?
    10 - Ignore Apple
  • Think Seriously About Developing Markets

    One of the nice things about Motorola's mobile devices is that they appeal to buyers in developing world markets. Lenovo already has a presence in Asia, but finding a way to leverage the Motorola brand in Africa, South America and other developing areas could help it sell more units. If Nokia can do it with its Asha line, why can't Lenovo do the same with Motorola?
    11 - Think Seriously About Developing Markets
 
 
 
 
 
 
 
 
 
 
 

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