Thursday, May 26, 2016

Motorola, selling nearly half of Lenovo's Q4 phone total, 'did not meet expectations'

Lenovo today announced its fourth-quarter earnings results for the three months ending March 31, 2016. For that period, some 10.9 million smartphone shipments were recorded. Of that, nearly 5 million units came from Motorola, which is now fully integrated into Lenovo, for $1 billion in revenue.

Compare that to the previous quarter, however, and things aren't so rosy. For Q3, Motorola contributed $2 billion, and that was only counting Motorola for two of the three months in the quarter. We don't have specific Motorola shipment numbers for Q3, but total smartphone shipments for Lenovo's Mobile Business Group in Q3 were 20.2 million units — more than double that of Q4.

Even with expectations that Q4 would be weak considering the device announcement cadence of Motorola (sales in the quarter leading up to a new device launch are typically low), that's a stark contrast.

That performance led to somewhat scathing commentary in Lenovo's earnings release.

"These results show integration efforts did not meet expectations. Lenovo has learned a great deal since the close of the Motorola acquisition and is applying learnings quickly, with actions in organization, leadership and approach."

One of those actions saw the departure of Motorola CEO Rick Osterloh, who has since been rehired by Google (which offloaded Motorola to Lenovo in 2014 for nearly $3 billion) to run that company's new hardware division.



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