Motorola created some amazing devices in 2013 with Google’s backing, including the Moto X and Moto G. Of course, it also lost obscene amounts of money each and every quarter while doing so. Lenovo is preparing to finalise the deal to buy Motorola from Google, and it’s planning to stop the losses in short order. However, Motorola CEO Dennis Woodside isn’t going to be there to see it – Woodside has left Motorola to take the chief operating officer job at Dropbox. Is this the beginning of a Motorola brain-drain?
Woodside isn’t exactly a household name, but he is credited with leading the charge at Motorola over the last two years which resulted in the company once again making phones that people actually want to use. Losing him to Dropbox is undoubtedly a blow to Motorola, but he’s probably about to cash in big time on the Dropbox IPO. In some ways, it’s a step up – Dropbox is valued at about $10 billion (£6 billion) right now, but the Motorola Mobility sale only valued the phone maker at a little under $3 billion (£1.8 billion).
Google bought Motorola back in 2012 probably expecting the company to continue losing money – although haemorrhaging a few billion might not have been in the plan. It’s fairly clear at this point that Google was willing to take that risk to get Motorola’s juicy patent portfolio, almost all of which it is holding on to. Lenovo isn’t buying Motorola to lose money, though. Lenovo CEO Yang Yuanqing says Motorola can be made profitable in just a few quarters. Let’s not ignore the fact that Woodside was CEO of Motorola for two years as it lost money – that’s a big deal for a CEO.
Lenovo reportedly plans to turn Motorola around by bringing it back to China and other emerging markets, while also competing in the US with high-end devices. That means we might see many more phones like the Moto G out of the new Motorola, and fewer like the Moto X. That might help the bottom line, but the Moto G was a bit of an outlier in the world of budget phones – it was actually good. Without a strong product vision, it’s easy for inexpensive phones to go wrong and offer a poor experience. Woodside has proven he can run a company that makes successful low-end phones, but now he’s gone.
Under Woodside’s leadership, Motorola was able to make devices that didn’t cost as much as the competition, but still offered excellent experiences. If too many of the product people at Motorola follow Woodside out the door, it might be terribly difficult for Lenovo to continue that tradition.
A company’s corporate culture can be almost as important as how much money it has to work with. If Motorola becomes a different company after this sale, it might not matter how many entry-level phones it can sell in China.
You might also want to read our piece on whether Lenovo's acquisition could turn Motorola into a bland smartphone maker.