When it comes to the smartphone business, Lenovo has seen some strong growth in India in 2015 and is now part of the top five vendors. The Chinese technology behemoth (coupled with the Motorola brand) is looking at India as a new avenue of growth and wants to target a bigger share of the pie, revealed Aymar de Lencquesaing, senior vice-president, Lenovo Group, and chairman & president of the Motorola Mobility Group. In a recent interaction with Shruti Dhapola, the senior executive outlined Lenovo’s broader smartphone strategy for India and gave an insight into how the Lenovo-Motorola equation is working post the acquisition. Edited excerpts:
On pricing pressures in India.
Yes smartphone business is a cut-throat one. From time-to-time, you will see the focus shift to different geographies. There are a number of brands that are here one day and gone to the next. We have to continue delivering value products and building our brands. In the Indian market today, despite the competition, we have managed to build ourselves and are flirting with a 10% bar on market share. We are as capable of competing with anyone else.
On the Lenovo-Motorola integration.
It is about aligning the two organisations. Acquisitions always take a bit of time, it doesn’t happen overnight. You have to clearly assess the strengths and weaknesses of two organisations and how you match them and leverage the best practices ? This marriage was made-in-heaven as both companies were extremely complimentary. Now we have organised more of our backend; in particular the R&D functions are incorporated within Motorola, so the teams are all under the Motorola umbrella. The design, the product line-up, all of that is more comprehensive across the board.
On the growth in Indian market and what the drop in China means.
It is a long game. Quarter-to-quarter it depends on your product release, positioning. So I am not going to judge the team on a quarter on quarter basis. We have to look at it from a longer horizon. I remain confident that if you look at it year-on-year, then next year we’ll have grown share in India.
On the fall in China, there has been a change in the market. We were very closely working with operators to subside the phones, and the model of operators shifted. As a result, we had a transition to manage and we need to regain share that was lost. That’s a very China-centric statement.
We have a dedicated effort to regain China, India is big on the horizon, we want to gain share and scale here, and then there’s North America.
Rest of the world is however growing, at 68% year-on-year in a number of places. In India we saw 90% annual growth. Our business actually has a strong footprint in Brazil, Latin America, Middle East. India is doing well as are the South East Asian markets. In North American market we had a strong relationship with Verizon, which will expand further.
You see, there is no single dependency on just one country. In Brazil, we are number two in the market, and we can replicate it in other markets as well, including India.
On the focus in India.
The onus in India right now is to grow market share and we will continue to ramp up production as needed. My number one concern in India is that we continue to grow share. This is a $400 plus bn market in value and our business is somewhere under $10 bn, so it leaves us ample opportunity to grow. How do we consistently grow market share is our top concern.
You’ll also see us ramping our offline presence in India as well. There are some markets where we are already number two, so it is possible to get to number two in India. I am not making a broad prediction that we’ll get to that overnight in India.
On maintaining customer loyalty and plans to target more premium segment.
I think for a brand it is important to exist in all the segments. With Lenovo and Motorola brand names, we have strong brand equity that already exists and gives us a lot of legitimacy to cover the spectrum and whole range. So it’s not like we have to play only in the entry-level or the mid-range. Our approach in the premium market is to be differentiated, and we are differentiated on innovation. This is the whole point of Mods; Mods is a game-changer in this industry we believe. We understand that a consumer wants to do a lot more with their phone.