Hello Moto! is perhaps a tune that will always be attached to mobile handset brand Motorola. The mobile handset manufacturer, which has seen its share of ups and downs, is now a Lenovo company. It is back with a bang with a new Moto Razr besides other handsets such as the Edge 50 Pro launched earlier this month. Interestingly, the company that claimed to have returned to the drawing board to rework its business strategy stated that from 2019 onwards it entered a phase called ‘acceleration’. “This was the time when everyone saw the launch of new products besides us entering the premium franchises. And then starting FY23, we entered a phase of hyper-growth. The next three years are a phase of hypergrowth for us. We aim to achieve the number three position in the global market as well as in India because India happens to be one of the world’s largest smartphone markets. So, if globally, we want to be number three in that case we have to occupy the same place in India, and the target is to achieve the same by the end of Q4, FY25-26,” Shivam Ranjan, head of Marketing, Motorola – Asia Pacific, told BrandWagon Online.
The global smartphone market grew by seven percent year-on-year (YoY) to reach 323.2 million units in Q4, 2023, as per market research firm Counterpoint’s latest study. Apple grew by two percent YoY, overtaking Samsung for the top spot in Q4, 2023. Samsung, meanwhile, declined by nine percent YoY losing share to Apple in the premium segment, to Chinese OEMs such as Xiaomi in the mid-tier segment and to Transsion brands (makers of Infinix) in the entry-level. Samsung, nevertheless, retained the spot as the world’s top smartphone player annually, shipping the most number of smartphones in 2023.
Among the top five smartphone brands, Xiaomi grew the most by 23% YoY to 40.7 million units in Q4, 2023. Meanwhile, India’s smartphone shipments remained flat in 2023 at 152 million units, according to the latest research from Counterpoint’s Monthly India Smartphone Tracker. The first half of the year was challenging due to ongoing macroeconomic turbulence leading to low demand and an inventory build-up. The market started recovering in the second half of the year supported by 5G upgrades and better-than-expected festive sales. “Samsung led the market in 2023 with an 18% share driven by a strong performance of the A series, aggressive marketing in offline, and a focussed approach in the premium segment. vivo ranked second with a 17% share and led the affordable premium segment in 2023 driven by CMF (Colour, Material, Finish)-focused V29 series offline and T series online. Xiaomi slipped to the third spot in 2023 but captured the top spot in Q4 2023 driven by its strategy to launch 5G phones in the affordable segment, offline expansion, and a leaner portfolio,” Shubham Singh, research analyst, Counterpoint, said.
How it all began!
Add to this the series of age-old campaigns featuring actor Abhishek Bachchan including the one for Moto Razr. This was about a decade back and the time when the brand Motorola was not only number one in terms of market share but also mind share. And now after a decade, the brand is once again in the news as it tries to grab the attention as well as the share of wallet of the Indian consumer. “There was a period in the middle say about 2015 onwards till 2018-19, when everyone saw us consolidating. We introspected and re-calibrated. That was a journey that we call a journey of reset. We went back, we made our devices more competitive. We revised our cost structures, we fixed everything, and we focused on making profitable growth. So, we just focused on profitability and ensuring profitable growth. That was a strategy from a business perspective,” Ranjan explained.
In October 2014, Lenovo and Google announced the completion of the acquisition of Motorola from the latter. With the completion, Lenovo got Motorola’s portfolio of smartphones like Moto X, Moto G, Moto E and the DROIDTM series, as well as the future Motorola product roadmap.
Interestingly, with India being a price-sensitive market, the company claims to be one of the few brands that is present across all price points. According to Ranjan, in the mass segment at less than Rs 10,000 segment, the company sells phones under the Moto E series. Next, between the price range of Rs 10,000-20,000, we sell mobile handsets under the Moto G series. Then, for consumers who are willing to pay Rs 20,000 and above, it claims to sell phones under the Edge franchise. Lastly, the company’s flagship product Razr starts at Rs 60,000 and above.
“We will continue to not exit any particular price point. Our focus will be on two areas – premiumisation and experience. First, we are seeing a strong premiumisation trend in the market. So, more and more consumers are moving towards higher price points. They’re looking to pay more to get a better experience. So, consumers are buying experience more than just the price point. And that is what our endeavour has always been with our devices. We give better experiences and more meaningful experiences to consumers at more accessible price points. So, our Edge franchise and the Razr franchise both will contribute to our premium growth story. We will focus on the premium growth story constantly in the upcoming years,” he explained.
To be sure, data from Counterpoint revealed that the premium segment which comprises handsets in the price range of Rs 30,000 and above, witnessed a 64% YoY growth in 2023 driven by easy financing schemes, which resulted in consumers jumping price bands to purchase higher-priced smartphones. One out of every three smartphones were purchased through financing in 2023.
Furthermore, Motorola India too claims to have a similar story. The company claims that, last year, premium products’ contribution to overall revenue doubled and the company aims to increase this revenue contribution every year. “We will continue to focus on bettering consumer experience. For instance, the newly launched Edge has features like artificial intelligence. Not to mention our global partnership with Panton which has helped us create the design, style and colour of our handsets. Add to this the interconnected experience we have created through our software. Secondly, to promote our growth in the Indian market, we will further focus on the 5G segment,” he noted.
According to the handset manufacturing firm it plans to target the affordable 5G mid-segment consumers which resides between the price of Rs 10,000-20,000. with Moto G series, which has been a very popular franchise for us globally, as well as in India. Ranjan further claimed that the brand has been seeing a lot of traction for its products Moto G 50, and Moto G 34, for which the starting price is Rs 10,000. “So, we will focus on premium as well as 5G handsets,” he added.
Moreover, to drive sales, Motorola claims to have initiated affordability schemes to match the aspirations of Indian consumers. “There are sets of consumers with aspirations who want to buy these products. And now there are platforms which give offers to these new to credit customers, thereby making products more affordable,” he explained.
The reach vs the recall!
There was a time when Motorola was remembered for its campaigns featuring actor Abhishek Bachchan, and experts believe that whatever little recall the brand has carried forward is from yesteryears and not of the current times. Some of its recent campaigns include ‘Flip into the Future,’ for Motorola Razr 40 Ultra. The company claims that to build its recall, it has already started to reach out to Indian consumers via various channels, especially digital. For instance, for Motorola Edge 50 Pro, the company plans to invest in marquee intellectual properties on connected TV besides linear TV. “As for consumers who are behind walled gardens and are rather difficult to reach through regular ad formats, we have taken ad space in key airports. Additionally, we plan to target premium audiences via premium cinema screens. Also, we have identified premium housing societies, where we have taken out-of-home space. Additionally, we have taken branding on Lyft. Finally, we have not limited our presence to standard social media channels like YouTube and Instagram shorts but also on apps like Uber,” Ranjan added.
The company further claimed that its investment in marketing is directly a function of business. As its business continues to double, so will its investment to reach its target of being the number three player in the market. However, experts remain a bit cynical about the brand’s growth trajectory. “Motorola had a heritage in the Indian market. A heritage that has frittered with lack of use for a large number of interrupted years. The brand is now attempting to revive its imagery in an era of complete clutter from within and without the category. The brand’s old strength has been lost in translation. Motorola needs to segment its audience right and focus on the younger sub-segments with sensitivity and differentiation,” Harish Bijoor, brand and business strategy specialist, explained.
Meanwhile, the company further plans to expand its presence in offline retail stores. Yet, it claims that currently, the revenue split is 50-50% between offline and online. In terms of online, the company claims that its products are sold on both Flipkart and Amazon in addition it wants to expand its presence on the direct-to-consumer (D2C) website. “As for the offline presence, besides being present across modern retail outlets, we are also present in general trade stores and MBOs (Motorola branded outlets). Our products are present across Reliance Digital. We are also partnering with Reliance for their O2 strategy and Jio Mart Digital stores which has led to the expansion of our presence to about 40,000 stores. This way we are reaching consumers in tier-2 and tier-3 cities,” he noted.