Lenovo Says Motorola Will Be Profitable Within 18 Months

Motorola looks like it is off to a promising start under the ownership of Lenovo. The Chinese firm revealed that its new phone business — acquired from Google in October for $2.91 billion — shipped 10 million smartphones last year and is estimated to be 12-18 months from profitability.

Lenovo, which ranks third on global shipments when Motorola’s haul is added, confirmed that Motorola’s shipments rose 118 percent year-on-year. The Motorola business pulled in $1.9 billion in revenue last year, and Lenovo believes it can be made profitable in four to six quarters of business.

That prediction is a far cry from the perpetual gutting of the company that occurred after it was acquired by Google. Motorola underwent multiple ‘streamlining’ processes, which saw thousands of employees laid off worldwide, websites shut down and exits from some country markets.

Lenovo is already busy rebuilding the company. It is poised to reenter the Chinese market early this year, where it will be one of three smartphone brands operated by Lenovo. Alongside the main product line and Motorola, the firm is preparing to introduce a new Xiaomi-like handset brand focused on mid-range and affordable segments.

The new Motorola figures were revealed as part of Lenovo’s Q3 2014 financial report, which included $14.1 billion in revenue, up 31 percent year-on-year. Gross profit for the period rose 54 percent annually to reach $2.1 billion, although the company’s PC business continues to account for a dominant (65 percent) share of income.