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. ALSO READ: Smartphone user base in India crosses 300 million, Chinese brands dominate the market: Counterpoint
“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.” RELATED: Moto Z Review: The Tony Stark of smartphones
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. ALSO READ: Motorola Moto Z with Moto Mods is modular smartphones done right
Lenovo is currently gearing up for its generation of Moto smartphones, Moto G and Moto G5 Plus. Showcased at the MWC 2017, the smartphones are expected to be launched on March 15 and will be Flipkart exclusive.