Lenovo chief executive pledges to end losses at Motorola Mobility
Mainland PC manufacturer will make newly acquired phonemaker profitable in 6 quarters
Lenovo, which is buying Motorola Mobility from Google, plans to make the phonemaker profitable within four to six quarters without eliminating jobs, according to chief executive Yang Yuanqing.
"Don't be scared by the US$1 billon-a-year loss," Yang said at the Mobile World Congress in Barcelona yesterday. "We will improve that even from day one. Google is very good at software, ecosystems and services. But we are stronger in the manufacturing of devices."
The timetable is based on after the acquisition is completed, and Yang said he's optimistic Lenovo will receive regulatory approval.
Yang has bet he can use the purchases of Motorola and IBM's low-end server business, for a total of US$5 billion, to move beyond the shrinking personal-computer market to become a broader technology company. The acquisitions, both larger than any Yang has previously completed, will challenge his ability to absorb the new teams and find the cost savings to make the units profitable.
Don’t be scared by the US$1 billon-a-year loss. We will improve that
Improved profitability will come from increased production and sales as the company targets emerging markets, Yang said. The company will also seek to reduce costs from internal communication and computing services. Motorola's gross margins are already "pretty decent", he said.
