Last year, Brazilian Sergio Buniac became the global president of Lenovo’s mobile division, which includes Motorola: he had the challenge of reversing the brand’s constant losses, and he succeeded. In the last quarter of 2018 and the first quarter of 2019, the manufacturer added $ 7 million in profit – and wants to launch more phones to maintain this performance.
Between October and December 2018, Motorola posted a $ 3 million profit. From January to March this year, the company achieved another US $ 4 million in earnings. Buniac says in an interview with Value that the goal is to maintain four to six consecutive quarters of profitability.
The executive promises to accelerate Motorola’s launch cycle to draw consumer attention and fight the downturn in the smartphone market; IDC estimates that cell phone sales are expected to fall 1.9% compared to 2018.
Therefore, Motorola wants to place its products on the market as soon as the development is finished in the laboratories, instead of waiting for specific moments – as Apple and Samsung, for example. “If you want to have innovation, you can’t have the strings of generations,” says Buniac.
He says the focus will be on the Motorola One line, which includes intermediate devices with a guaranteed two-year update. The company has been moving away from the high end, launching the Moto Z4 with Snapdragon 675 processor and saying it will not have new Moto Z phones this year.
Motorola left some countries to reverse loss
The president of Motorola reversed the losses after closing operations in some emerging countries, such as Malaysia it’s the Kenya, which did not work. “There was an idea that it was normal to lose money in this market, which is how it works, but it is not,” explains Buniac to the Value.
Efforts were concentrated in Latin America, the USA and Europe. It has also reduced the variety of components used in cell phones by 30%, and has reorganized senior executives in several countries.
The profit margin is still miniscule, hovering around 0.3%. That is, for every $ 100 in billings, Motorola manages to keep only $ 0.30 in profit; the rest goes to development, manufacturing, marketing costs, among others. Still, it’s a better result than companies like LG, which have accumulated $ 2.5 billion in losses in the mobile division since 2015.
With information: Value.