Google Tweaks Motorola’s Business Focus, Eyes Enhanced Smartphone Thrust
Google has commenced reengineering efforts on Motorola Mobility, signalling serious intents on the part of the tech giant to turnaround at the soonest possible time an ailing firm it bought for more than $12 billion in May this year.
The move will lead to Motorola closing down a number of its global operations, most of which unprofitable, Google said on its latest regulatory filing in the United States, and will also create the inevitable scenario of any corporate reconfigures - job losses.
Google said some 4000 employees will be axed in the process and most of the separation will occur outside of Motorola's U.S. operations.
According to The New York Times, four out of ten Motorola senior executives would be given the pink slip soon and they will be replaced with a leaner management team that will be tasked to focus on one single goal - make a dent on the intensely growing smartphone market.
Part of the overall streamlining efforts is the reduced presence in emerging markets like China and India, which media reports said is Google's way of remapping the business strategy of Motorola.
In an interview with The NY Times, new Motorola Mobility chief executive Dennis Woodside disclosed that on top of his priority list is to introduce new smartphone models that will replace the company's current product line-up.
And they will be few, Mr Woodside noted, but he assured that what Motorola will roll out in the market soon would be able to compete with the best that can be offered by Apple and Samsung, currently the market leaders.
He expressed confidence that the tweaks would allow Google to arm Motorola properly as it prepares to collide head-on with present industry giants.
"The Google business is built on a wired model, and as the world moves to a pretty much completely wireless model over time, it's really going to be important for Google to understand everything about the mobile consumer," Mr Woodside told The NY Times.
Google is also hopeful that its latest move will stem the losses that its new acquisition has been incurring over the past four years, the latest of which amounted to about $230 million in the June quarter.
Analysts said Google is fairly realistic about Motorola's near-term prospects as it informed investors not to expect revenues from the division in the upcoming quarters since the cost-saving measures will take some time to take effect.
The internet giant also flagged additional costs to come with the adjustments on Motorola, chief of which is the $US275 million that Google expects to spend on severance compensations plus other restructuring expenditures that cannot be ascertained at this time.
All these charges will be reflected on Google's September quarter report, according to The Associated Press (AP).
Google's hands started working on Motorola as the tech world gears up for an exciting period in the industry come the last quarter of 2012, which will be marked by the strings of product debuts coming from Apple, Microsoft and Samsung.
New devices will be released later this year, most notable of which is Microsoft's new foray into hardware business as it is set to market the new Surface tablet that will be powered by the fully-revamped Windows 8.
Surface represents Microsoft's business refocus, which is a strategy adopted earlier by Google when it rolled out the Nexus smartphone and tablet computer.
Analysts expects too see fiercer competition environment in the immediate periods ahead as tech giants opted to thread on turfs that were beyond their so-called comfort zones.