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Lenovo: Motorola Acquisition 'Did Not Meet Expectations' (theverge.com)

Posted by msmash on from the when-the-going-gets-tough dept.

Lenovo acquired Motorola from Google in 2014. Since then, the Chinese technology conglomerate has been trying to merge Motorola's offering into its large portfolio. But things aren't going as planned. Lenovo on Thursday announced that the "integration efforts did not meet expectations". The company, however, insists that it has drawn many lessons from the experience since the close of the Motorola acquisition, and it is making changes to them quickly.

It's not the best time in the market if you're an Android smartphone maker. There's an increasingly growing competition especially from companies such as Xiaomi, Meizu, Micromax, Yu and others that are making premium smartphones with a razor-thin margin. Any unique feature a smartphone maker introduces is seen replicated in others' offerings within weeks.

20 of 62 comments (clear)

  1. This should have been obvious... by __aaclcg7560 · · Score: 2, Interesting

    No one wants a cellphone that phone homes to China.

    1. Re: This should have been obvious... by xenoc_1 · · Score: 5, Informative

      Pretty much every single smartphone is made in China. Regardless of brand, major or minor, "Western" (Apple, Microsoft/Nokia, rump-Nokia, Alcatel, or low-ends like Blu, etc.), "Developed World Asian"(Samsung, LG, HTC, etc.), or Chinese (Huawei, Oppo, OnePlus, etc.) as the "manufacturer".

      Many by the same contract manufacturers in China. And no, that "Designed by Apple in California" or "Google Nexus" branding and supposed oversight does not guarantee that spying firmware and hardware can't get into some subset of phones.

      It's pathetically hilarious when legislators or "patriotic citizen" low information types rant about evil Chinese companies making the products and demand only 'Murrican brands.

    2. Re: This should have been obvious... by __aaclcg7560 · · Score: 2

      Pretty much every single smartphone is made in China. Regardless of brand, major or minor, "Western" (Apple, Microsoft/Nokia, rump-Nokia, Alcatel, or low-ends like Blu, etc.), "Developed World Asian"(Samsung, LG, HTC, etc.), or Chinese (Huawei, Oppo, OnePlus, etc.) as the "manufacturer".

      How many of these companies have a reputation for inserting backdoors into their devices? Google moved away from Lenovo laptops because they found backdoors in the BIOS that linked back to China.

    3. Re: This should have been obvious... by __aaclcg7560 · · Score: 2

      There have been no backdoors, albeit a lot of stupid security decisions that put Lenovo users at risk from people.

      Right...

      Lenovo is one of the world's largest PC brands, but it is also a Chinese PC brand. With the US and other Western countries increasingly looking at China's cyber warfare division as the next great threat, that was bound to create some issues. However, recent news revealing that spy agencies in the US, Britain, Canada, Australia, and New Zealand have prohibitions against using the company's products seem to be based on more than general suspicion.

      Apparently, the ban stems from concerns that Lenovo, which is partially owned by the Chinese government's Academy of Sciences, has built "malicious circuits" into their machines. Testing allegedly proved the existence of backdoor functionality built into Lenovo-brand circuit boards, along with other vulnerabilities built into the firmware.

      http://www.geek.com/chips/spy-agencies-shun-lenovo-finding-backdoors-built-into-the-hardware-1563801/

    4. Re: This should have been obvious... by Junta · · Score: 2

      " Australia Department of Defence available on their web site that says “This reporting is factually incorrect. There is no Department of Defence ban on the Lenovo Company or their products; either for classified or unclassified systems.”"

      Also, 'apparently' and 'allegedly'. No agency has actually come out and said anything. This means that either they *did* find something and they are keeping it secret, counter to their mission of safeguarding the security of their citizens, or they *didn't* find anything, but someone wanted to spread some FUD, either because they have something to gain or they want to push an anti-China agenda (which is understandable, but unsubstantiated claims do not exactly help their cause).

      --
      XML is like violence. If it doesn't solve the problem, use more.
  2. Sad to see this happen to Moto by allquixotic · · Score: 4, Interesting

    My first "new-age" smartphone (discounting those horrid old 3G Windows Mobile phones with a stylus in the mid-2000s) was a Motorola Droid 2. For a number of years, Motorola was well-known and respected among smartphone users for:

      - Shipping fairly high-end kit, though perhaps not always the latest and greatest
      - Very good power efficiency (for Android)
      - A lack of the excessive amount of crapware you get on most phones; only the bare minimum the carrier forces on you
      - A close-to-vanilla Android experience
      - Great build quality and premium feel
      - Reasonable prices - they were never the most expensive in the marketplace
      - Generous battery capacity -- which, when combined with the power efficiency of their tuned SoCs, led to awesome battery life without any external batteries or extended batteries
      - One of the less-hyped smartphone manufacturers (compared to Apple and Samsung) that still churned out well-engineered products and listened to their customers

    Unfortunately these virtues seem to have fallen by the wayside to an extent, and the dominance of Samsung, (LG?), and Apple has pushed them out of the market it seems.

    The only effect Lenovo could possibly have on them is to force them to cheapen their build. Everything Lenovo touches turns to cheap plastic.

    1. Re:Sad to see this happen to Moto by Ken_g6 · · Score: 2

      - A lack of the excessive amount of crapware you get on most phones; only the bare minimum the carrier forces on you

      That must be what confused Lenovo - they probably wanted to install Superfish on the things.

      --
      (T>t && O(n)--) == sqrt(666)
    2. Re:Sad to see this happen to Moto by drinkypoo · · Score: 2

      My Moto G 2nd meets all of those criteria. It's a non-partnered phone I bought through Amazon. It had no crapware, just some Motorola apps like migrate, most of which could be removed. The battery capacity is pretty good since it has an old GPU, which is fine for my purposes. The build quality is excellent and I've dropped it several times without harm. It cost $200 brand new when it had just come out. The software support has so far been very good. What's not to like?

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  3. Their fall makes me sad by cant_get_a_good_nick · · Score: 3, Informative

    I have some friends who work at Motorola. My cousin's hubby is an engineer there. He's worked his ass off on phones, back and forth to factories in china all the time. All for naught.

    An interesting read: Lenovo/Motorola repeating the mistakes of HP/Palm

  4. comparing and contrasting by nimbius · · Score: 3, Funny

    Lenovo spokesperson: This certainly didnt meet our expectations...we should learn and grow from the experience.
    Microsoft spokesperson: The Windows phone is, and will always be, a perfect success. our acquisition from Nokia was, and always will be, a good decision. less than 1% market share is precisely the finest definition of this success. Now if you'll excuse me, I need to shovel a few more coal-like employees into the furnace of unemployment, that our steam engine of failure might surge ever mightier into oblivion in its quest for bankruptcy.

    --
    Good people go to bed earlier.
  5. How about... by dwheeler · · Score: 2

    I think a lot of Android users would like a phone that (1) gets security updates in a timely way, (2) has reasonably current features, (3) is generally trustworthy, and and (4) isn't force-loaded with lots of uninstallable crapware. Android is a nice OS, but a lot of the smartphone manufacturers seem to assume that users don't care about these things.

    --
    - David A. Wheeler (see my Secure Programming HOWTO)
    1. Re:How about... by DiSKiLLeR · · Score: 2

      And the answer is Nexus 6P.

      It has everything you just said.

      The stock android experience is gorgeous.

      --
      You can tell how powerful someone is by the magnitude of the crime they can commit and be able to get away with.
    2. Re:How about... by Daetrin · · Score: 2

      And fits comfortably in my hand!

      Oh wait, that hasn't been true of the Nexus line since Nexus One.

      So Motorola! ...no wait, they stopped making them reasonably sized after the first gen Moto X.

      So.... the answer is Sony now i guess?

      --
      This Space Intentionally Left Blank
  6. What it Really means by sycodon · · Score: 4, Insightful

    We've completed sucking all the IP out of Motorola and are ready to ditch it by one means or another.

    --
    When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
    1. Re:What it Really means by ShanghaiBill · · Score: 4, Insightful

      Ah yes, Merger and Acquisitions. Seems to work out well for the Wall Street types. For everybody else, not so much.

      Indeed. Roughly 80% of M&A's fail, and lose value for shareholders. But every CEO is sure his deal will be one of the 20%.

    2. Re:What it Really means by Kjella · · Score: 2

      Indeed. Roughly 80% of M&A's fail, and lose value for shareholders. But every CEO is sure his deal will be one of the 20%.

      Depends on what the long term effect is, which I don't think you can conclusively say is a loss. Many buy-outs are to pay off a potential challenger before they become a real threat or to pick up a failing company's assets so it doesn't fall into the wrong hands or to round out a portfolio so you can be a "full service" partner. Very often there's an element of insurance and short term you'll pay the "insurance premium" as the bought assets are devalued back to their actual value or even put in the drawer. I think those are a relatively large part of the volume where you don't expect the bought assets by themselves to be much of a money maker. And then there's the big, spectacular failures...

      --
      Live today, because you never know what tomorrow brings
    3. Re:What it Really means by Not_Wiggins · · Score: 4, Informative

      I don't know how much IP Lenovo got... Google seems to have kept much of it.

      --
      Diplomacy is the art of saying, "Nice doggie!" until you can find a rock.
  7. Whose expectations? by hey! · · Score: 3, Interesting

    My default expectation in any high profile acquisition is that the target company's stockholders will do well, the CEO of the acquiring company will make a bundle, and the stockholders of the acquiring company will take a bath.

    --
    Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
  8. Doomed from the beginning by Andy+Dodd · · Score: 3, Informative

    "One aspect of its refreshed strategy is to have two co-presidents, with two distinct strategies for China and the rest of the world."

    This should have been the strategy from the beginning. The Chinese domestic market and the global market are vastly different. Cheap unmaintained crap with a glossy UI painted over a broken core does great in China, but Westerners hate it.

    Similarly, the "clean" UI preferred by Westerners is hated in Asian countries, especially China.

    Moto declined because its customers began seeing evidences of "Chinaficiation" - Lenovo fired Motorola's applications team who knew how to make "value add" additions to Android without falling into the "Touchwiz Trap", and then continued with a rapid-fire string of early EOLs from a manufacturer whose recent successes in the West entirely were due to a reputation of "affordable but not crap with rapid updates".

    --
    retrorocket.o not found, launch anyway?
  9. Actually, by AF_Cheddar_Head · · Score: 3, Informative

    I recently purchased a MotoX Pure Edition and MotoG Third generation and most of the is is still true. The MotoE is reported to be a pretty good entry-level android phone.

      - Shipping fairly high-end kit, though perhaps not always the latest and greatest
      - Very good power efficiency (for Android)
      - A lack of the excessive amount of crapware you get on most phones; only the bare minimum the carrier forces on you
      - A close-to-vanilla Android experience
      - Great build quality and premium feel
      - Reasonable prices - they were never the most expensive in the marketplace
      - Generous battery capacity -- which, when combined with the power efficiency of their tuned SoCs, led to awesome battery life without any external batteries or extended batteries

    Hopefully Lenovo doesn't go the route they did with the Thinkpad line and totally ruin the quality.