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Motorola and Lenovo brands to co-exist in India

New Delhi: After the closure of its $2.9 billion Motorola acquisition, world's fourth largest smartphone maker Lenovo Thursday said it will continue to sell the US brand as a separate label in India, one of

PTI [ Updated: October 31, 2014 16:44 IST ]
motorola and lenovo brands to co exist in india
motorola and lenovo brands to co exist in india

New Delhi: After the closure of its $2.9 billion Motorola acquisition, world's fourth largest smartphone maker Lenovo Thursday said it will continue to sell the US brand as a separate label in India, one of its "most important" markets.

In January this year, Lenovo had announced that it will acquire Motorola Mobility for $2.9 billion (roughly Rs. 17,800 crores) from tech giant Google, one of the largest acquisitions by a Chinese tech firm. Google, itself, had bought Motorola in 2012 for $12.4 billion.

"India is one of the most important markets for Lenovo. Lenovo and Motorola combined are third in the Indian market after Samsung and Micromax... We will continue to sell Motorola handsets online and Lenovo in offline stores," Lenovo Chairman and CEO Yang Yuanqing told reporters in a conference call.

He added that while the dual brand strategy will be for emerging markets like India, the company will use the Motorola brand in mature markets like the US.

In India, Motorola sells its devices in partnership with e-Commerce major Flipkart. Its range in the country includes Moto G, Moto E and Moto X as well as the Moto 360 smartwatch.

It has recently unveiled the second generation of Moto G (Gen 2) and Moto X (Gen 2) smartphones.

India is one of the fastest growing smartphone markets globally. According to IDC, 63.21 million units were shipped to India in Q2 2014. Samsung had a 29 percent share, followed by Micromax 18 percent and Karbonn at 8 percent. Motorola had 5 percent share.

"We will be a wholly-owned subsidiary of Lenovo and remain headquartered in Chicago's Merchandise Mart while maintaining offices around the world, including in Silicon Valley," Motorola Mobility President Rick Osterloh said.

The iconic Motorola brand will continue as will the Moto and DROID franchises that have propelled growth over the past year, he added.

With the completion of the acquisition, Lenovo has added nearly 3,500 employees globally, including about 2,800 in the US.

"This partnership has always been a perfect fit. Motorola brings a strong presence in the US and other mature markets, great carrier relationships, an iconic brand, a strong IP portfolio and an incredibly talented team. This is a winning combination," Yuanqing said.

Liu Jun, Lenovo Executive Vice President and President of Lenovo's Mobile Business Group will be the Chairman of the Motorola Management Board.

Osterloh, a Motorola veteran, will remain President and Chief Operating Officer of Motorola.

According to IDC, Lenovo had a 5.2 percent share of the global smartphone market in the July-September 2014 quarter, which saw a total of shipment of 327.6 million devices.

Samsung, Apple and Xiaomi had 23.8 percent, 12 percent and 5.3 percent share of the global market, respectively.

"We expect to sell more than 100 million mobile devices this year, including smartphones and tablets, by leveraging the Lenovo brand's leading market position in China, our shared momentum in emerging markets, and Motorola's strong foothold in mature markets like the US," Jun said.

Lenovo expects to make the Motorola business profitable in four to six quarters, he added.

Google will maintain ownership of a majority of Motorola Mobility patent portfolio, while Motorola will retain over 2,000 patent assets and a large number of patent cross-license agreements as well as the Motorola Mobility brand and trademark portfolio.

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