Lenovo creates a big mobile buzz

Feb 24 2014, 15:21 IST
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The purchase of Motorola’s cellphone business will give Lenovo a bigger say in the booming smartphone market. The purchase of Motorola’s cellphone business will give Lenovo a bigger say in the booming smartphone market.
SummaryThe purchase of Motorola’s cellphone business will give Lenovo a bigger say in the booming smartphone market.

It’s known in trade circles as the great Chinese invasion. We are referring to the flight of numerous mobile handset makers from mainland China—Gionee, Huawei, Oppo, Lenovo, ZTE—to grab large opportunities in the hyper-competitive Indian smartphone market. Samsung might be the most popular smartphone brand here, facing stiff competition from some of the homegrown brands such as Micromax, Lava, Karbonn, but it is the Chinese brands who seem to be capitalising on the strong customer demand for advanced touchscreen phones with faster processor, better camera with improved picture quality and long-lasting battery life at lower prices.

In particular, the $34-billion Beijing-headquartered Lenovo (another HQ is in Morrisville, North Carolina, US), which wants to be known as a PC+ brand in the marketplace. In a short span, it has managed to stand out in the domestic market with its aggressive business strategy in order to drive revenues in what it calls the PC+ segment comprising smartphones, tablets and convertibles. It goes without saying that smartphones are integral to its overall growth strategy.

Lenovo has put together a senior management team well versed with the Indian market, introduced a slew of mobile phones targeting the entire spectrum of the market—top level, premium segment, middle segment and the entry-level segment—and launched a focused branding and marketing exercise to strengthen its market share in India. The net result: company officials claim that Lenovo smartphones have been growing 100% quarter on quarter in India when the market is growing 15-20% in the same time period.

Lenovo is the world’s number one PC company, number two PC + tablet maker and number three smart connected device maker. It purchased its PC business from IBM in 2005, and has gone on to create a continually successful line of ThinkPad laptops from it. Recently, Lenovo announced that it will buy Motorola Mobility from Google for $2.91 billion in a mixture of cash and stock. It will give the Chinese smartphone manufacturer a major presence in the US market and within a year of the Motorola acquisition, Lenovo expects to sell 100 million smartphones worldwide. In 2013, Lenovo shipped an estimated 45 million smartphones, a 90% growth from the previous year.

Before we delve into the business strategy being deployed by Lenovo to capture people’s minds and hearts here, first a quick look at some of the striking trends from the country’s mobile landscape. According to recent IDC findings, the total shipments

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