There has been a lot of confusion around how Lenovo wants
to project its Motorola division. While the company initially embraced a
dual-brand strategy, there have been multiple reports about Lenovo’s
efforts to have a more extensive presence on the Moto phones. Lenovo had
planned to use ‘Moto by Lenovo’ branding on the Moto phones but now has
scrapped the idea.
Motorola India’s Managing Director Sudhin Mathur has now reaffirmed
that Lenovo’s dual-brand strategy will continue in India, though
Motorola will be positioned as the “face of the communication.”
“We will continue with the dual-brand strategy in India and in some
other markets. That’s the way it had been and will continue to be. How
will we evolve over the period of time? We are on a transformational
journey. We are looking at different geographies and seeing how
consumers see us as and we will evolve from there,” he commented.Sudhin’s comments come after Motorola Chairman and President Aymar de Lencquesaing revealed that the company was going to reinforce all its energy on bringing back the legacy of Motorola. He also revealed plans to expand Motorola’s presence in the US by extensive distribution and marketing. “Give us 12 months, and everyone in the US will know the new Motorola,” he commented.
Lenovo’s newfound focus on Motorola isn’t really that surprising if you look at the company’s strategy for the brand in the last couple of years. Despite having an iconic brand under its belt for over two two years, Lenovo hasn’t really been able to make Motorola a success. A WSJ report points out that Lenovo forced Motorola brand in China in 2015 when its own phones were dominant and the market was increasingly becoming saturated. The move led to Motorola’s failure in China.
In the US, which is Motorola’s native market, Lenovo initially showed some interest by scaling up the advertising expenditures but later reduced spending on the ads and product development. The brand slipped behind Apple, Samsung and even brands like ZTE. With modular smartphone Moto Z receiving positive response worldwide, the company now hopes its smartphone business is now set for success.
But in India, it’s different story altogether. Lenovo-Motorola combined flirted with the number two and three spots throughout in 2016. According to IDC’s report for Q4 2016, Lenovo-Motorola was at the third place with 9.9 percent market share whereas Xiaomi ranked second with 10.7 percent market share.
Counterpoint’s report says that Lenovo (including Motorola) ranks fourth with 9 percent market share in the fourth quarter of 2016 and at the third spot in the calendar year 2016 with 9 percent share. While Moto smartphones have been primarily focused online, Lenovo phones have both offline and online presence. According to Counterpoint, Lenovo led with 6 percent of the total share whereas Motorola had 3 percent in CY2016.
“When they took over Motorola, they didn’t combine the
image. Lenovo’s strategy seems to be targeting the mid-range and premium
ranges with the Moto series whereas the Lenovo devices will be targeted
at the mid-range and budget segments. The dual-brand strategy has
worked for the company in India and it’s highly likely they will keep it
that way,” remarks Parv Sharma, an analyst at Counterpoint.
Lenovo had showcased a concept flexible phone last year
showing its prowess to develop future-ready devices. But does it mean a
premium Lenovo phone will be launched anytime sooner? According to Parv
Sharma, it might happen in the future but not at this moment.
“Currently, an overlapping is just in the budget segment but other
phones have been strategically targeted at mid-range and premium
categories,” he added.
Going forward, Lenovo is going to expand its base its
presence in the offline market. According to Sudhin Mathur, the company
currently sells one-third of its phones online and rest offline. Lenovo
aims to make more money from its offline market, he said. To achieve
this, the company plans to start with exclusive stores in top three
cities.
When asked about whether the company has plans to launch a 4G feature
phone, he responded, “No. Our strategy is very clear, we will only be
in smartphones.” On slowed migration from feature phones to smartphones,
he pointed out, “Internet penetration in India has been relatively
slow. Another reason is the price gap between feature phones and
smartphones is very high. You can get a feature phone for say Rs 700 but
a good smartphone will cost around Rs 4,000.”Sudhin was also optimistic about the potential of Moto Mods in India. He pointed out that there will be new mods coming out in 2017. Some of the mods will include an instant printer and multi-SIM snap on. There will also be a universal device that could be used to charge multiple mods at the same time
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