Published in Mobiles

Lenovo aims at the high end

by on29 May 2017

Because no one has thought of that

After Lenovo received a kicking off of its position of the world's third largest mobile phone maker following its acquisition of Motorola three years ago, it is hoping that getting into the high end will save its bacon.

Lenovo returned to profit in the year to March, but its losses in its smartphone business worsened. Much of this problem was caused after it acquired Motorola Mobility from Google for $2.9 billion in 2014 but struggled to integrate the assets.

Then it was battered like a Scottish Mars bar by competition from lower-end manufacturers in its home base of China such as Xiaomi and Oppo. It has since fallen to eighth in the world. Lenovo's reorganisation of its China business aimed at sharpening the PC brand's consumer focus comes amid an ongoing effort to tighten its mobile branding and shift the focus to pricier models under its Moto brand.

Chairman Yang Yuanqing said that Lenovo's cunning plan was to prioritise mature markets ... which need brands and innovative products, whereas emerging markets need efficiency.

"So we will have two teams catering to the two kinds of markets with different product lines."

The company currently has three phone brands in China - the premium Moto brand, the cheaper Lenovo series, and an online-focused ZUK brand launched in 2015.

A Lenovo spokeswoman said its global mobile strategy would focus on the Motorola brand, although it would continue to support its other lines, such as ZUK.

Moto products, including a premium series of modular phones designed with detachable components that can be replaced or upgraded, helped propel Lenovo to be the second-biggest vendor in Brazil, after Samsung, Yang said.

Shipments in Brazil rose 56 percent in the first three months of the year according to Lenovo, overtaking India as its biggest market, where volume grew 34 percent.

The average selling prices of Lenovo's mobile products rose 15.1 percent in the past year, according to its financial report.

Mature market competition, where Yang said Lenovo's main rivals are Samsung and LG is less fierce than in emerging markets, where the low entry barrier allowed in "too many Chinese vendors, some of which compete irrationally".

He added Lenovo will have three more telecom partners in the US this year, while its performance in Western Europe is improving.

Last modified on 29 May 2017
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