Lenovo, one of the world’s largest personal computer makers also has a smartphone department that is much smaller compared to its PC segment. It manufactures smartphones based on Google’s Android that makes it’s an easy choice for a large population. However, it still sells very less very devices in India due to numerous reasons.
The first reason is the lack of innovation. Lenovo as a company has always lagged in innovating for the smartphone world and thus it didn’t have any competitive edge over the others.
The second is its bad pricing strategy. Every company has its USP and that helps it sell. For instance, Apple sells to rich consumers who want to enjoy the Apple ecosystem and an exclusive closed source OS. Whereas, Samsung sells in almost all the price categories where the users have the trust of a brand but also the flexibility of purchasing according to their financial strength also enjoy an open-source highly customizable OS. Xiaomi has its USP of selling extremely affordable but very high value-for-money devices due to its mere 5% profit margin on its smartphones that is next to impossible for other players top charge. Lenovo has been developing any such USP.
Motorola was purchased by Lenovo from Google. This Lenovo-owned company has performed relatively well in India as compared to its parent company in terms of smartphones. It is trying to take care of the Indian manufacturing plants it has and make India its home for smartphones. The company is looking at the subcontinent with sparkly eyes and money in mind. Both Lenovo and Motorola are having a hard time coping with companies such as Xiaomi, Vivo, Oppo and now Samsung which are dominating the market. Currently, Lenovo is looking at only a 2% market share in the country.
The numbers are against Lenovo and Motorola but they have a plan to earn money. Lenovo and Motorola smartphones are manufactured together and this helps. The company is planning to make India its exports hub. The company is planning to ship the phones to Latin America, South East Asia, and the even Asia Pacific by the end of this month. Currently, 12 million units including Lenovo and Motorola are manufactured by the plant. That is the maximum capacity of the plant.
The PCBs or Printed Circuit Boards, chargers, batteries, and the assembly are done in the country. The manufacturing contract is given to American manufacturers Flex. Prashanth Mani, the country head for Lenovo and Managing Director of Motorola Mobility talked to ET about the exports plans. He said that the business can be scaled up easily and a lot of investment is going into the same but it all depends on demand.
He also talked about making choices and what the first priority of the company is. The idea of the company is to get consumers all the features at an affordable price and the company is not ready to do it at the expense of losses and is looking at profitability.
He said told ET, “We can always scale it up basis the demand. A lot of investment is going into this. We are not in the volume and value-share fights. Sometimes, it’s about making choices, and turning around Motorola into a profitable unit was the first priority. The idea is to get innovative features to consumers at affordable levels. We will not do it at the expense of losses, which some other brands are willing to take.
“Profitability can only happen for a brand if it follows the OnePlus strategy — being present in the mid and premium segment with an online-focused approach. If you want to do it with low volumes, you can become profitable,” he added.
On August 5, Lenovo appointed Ashok Nair as Director of Service Operations in India and reported to Alex Fu, Executive Director of Asia Pacific Services.
Lenovo Appoints Ashok Nair to Boost Market for Indian Service Operations Director. Nair will work with Rahul Agarwal, managing director and CEO of Lenovo India, to lead the growth strategy and make Lenovo India a “first-class” company in the IT services industry. He will focus on driving sustainable and profitable approaches across multiple routes and making Lenovo’s services a key differentiator.
Agarwal said in a statement that he is very pleased that Ashok has joined and that his control of the pulse of the consumer business has made him a key player in the organization. Ashok Nair has more than 20 years of experience in India and South Asia, especially in consumer-centric businesses. Ashok Nair also said that as the degree of economic digitization increases, India remains an opportunity for Lenovo’s high growth.