Amid slowdown in global smartphone sales, Lenovo plans to target Indian market aggressively

NEW DELHI(PTI):Chinese technology major Lenovo is betting on India to contribute significantly to its global growth even as smartphone sales slow down in its home market.

Lenovo, which received about US $1 billion in revenue from India last year, is also looking at bringing in more premium devices here, including new Moto Z smartphones that can be customised with ‘mods’. ‘Mods’ are specialised pieces of hardware that snap into place magnetically to give the handsets added capabilities. “We will continue to invest in the market and grow our share here, there is a strong long term potential,” Lenovo Senior Vice President and Co-President Mobile Business Group (MBG) Aymar de Lencquesaing told reporters here.

He added the potential in the Indian market is huge as 4G networks are being rolled out by telecom operators and there is robust economic growth. “We have a share of about nine% and we are focused on growing that. Getting to double digits should not be difficult,” he said. Last year, Lenovo’s revenues from India grew about 90%, even as that from China declined 26%. Overall, revenues grew 68%.

According to research firm Gartner, smartphone sales are expected to slow down in 2016 globally, rising only seven% compared to double digit growth seen in previous years. This is on the back of slower sales growth in mature markets like Europe and Japan. Smartphone sales were flat in China in 2015 and little growth is expected in the next five years. India, on the other hand, remains an opportunity and presents the highest growth potential, Gartner said.

Asked about the investment plans, Lencquesaing said the company is studying ramping up the manufacturing capacity in India from the current 6 million units. The enhanced capacity will be for meeting requirements in India and there are no plans to export from here as of now.

In August last year, Lenovo had partnered contract manufacturer Flextronics to start making Motorola and Lenovo smartphones in India at the latter’s unit at Sriperumbudur near Chennai.

Lenovo is also bullish on the talent pool in India and said it works actively with developers here. It also has a R&D unit in Bengaluru. Lenovo’s MBG sales for the quarter ended March 2016 stood at USD 1.7 billion. It shipped 10.9 million smartphones in the fourth quarter and 66.1 million in the full year.

Motorola contributed nearly 5 million units in the quarter to Lenovo’s total, while adding USD 1 billion to MBG revenues. In 2014, Lenovo had acquired Motorola from Google in a USD 2.9 billion deal. The company had said it will continue to sell the US brand as a separate label in India, which is one of its “most important” markets. Lencquesain, who is also Chairman and President of Motorola Mobility, said the recently launched Moto Z smartphones will come to India around September.

The premium Moto Z smartphones can be customised with ‘mods’. Apart from the device, which is expected to be priced upwards of USD 300, the ‘mods’ may be available for USD 50 onwards. Lencquesaing did not comment on the pricing for India.

“We have been successful in the mid-market segment globally but we are also making in-roads in the premium category,” he said. He added that the Indian market is also growing in terms of sales of more premium devices

Posted by on June 15, 2016. Filed under Economy. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.