Lenovo CEO eyes Motorola customisation in bid to beat Apple and Samsung
One benefit of Lenovo taking Motorola's devices business off Google's hands is that the Chinese company could bring the phone customisation services only available in the US under Google to new territories.
In an interview with Fortune on Thursday, Lenovo CEO Yuanqing Yang said he's had his eye on Motorola since 2011 and approached Google chairman Eric Schmidt about an acquisition soon after Google acquired for $12.5bn in 2012.
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Lenovo announced on Wednesday it was acquiring Motorola for $2.91bn, and Yang used his Fortune interview to outline a few of the company's ambitions for the newly-purchased unit, which could see the brand get a higher profile and stronger marketing outside of the US in a bid to shift Samsung and Apple from the top of the smartphone sales charts.
One way Yang sees Lenovo repeating its success with PCs in smartphone is, for example, launching the web-based customisation service Moto Maker in other markets. US customers can use Moto Maker to customise their Moto X orders online with up to 16 different coloured back plates, which are assembled at Motorola's Fort Worth, Texas, factory.
"In my understanding, Motorola does customisation of phones [in the US]. If that is what the market needs, we will definitely keep that. It is a good model, so we may replicate that in other markets," Yang told Fortune.
Moto Maker was a US-only proposition, and didn't make it to Europe for the launch of the Moto X earlier this year.
Questioned whether Lenovo can beat Apple and Samsung in the mobile market, Yang was unequivocal, telling Fortune: "Definitely, over time. Our mission is to surpass them."
According to Yang, Motorola will become Lenovo's main smartphone brand in the US, a country where it has no mobile presence. However, it will keep Lenovo in China and may re-introduce the Motorola brand there.
Lenovo shipped 45 million smartphones in 2013, mostly in China and emerging markets, according to IDC figures, while Motorola shipped around 10 million.
Lenovo will also use the Motorola brand to raise its profile as maker of both high and low-end devices and, according to Yang, can replicate the success it had in the PC market after acquiring IBM's PC business in 2005. (Lenovo in July overtook HP as the top PC vendor, and has managed to expand shipments at a time when all other rivals have seen shipments decline.) The acquisition also comes as growth in smartphone shipments slow.
"I think there are lots of similarities. We are definitely complementary, so we can replicate the success we've had with the ThinkPad in the PC business," Yang said. "I think this is a good deal for both Google and Lenovo. Together, we can win more market [share] and have a worldwide footprint."
One question is what role Lenovo will play in Google's Nexus brand, which has benefited its existing partners Asus, LG and previously Samsung.
While Lenovo has been tipped to make a Nexus device, Chris Jones, a principal analyst with Canalys, thinks the entire Nexus stable could be handed to Lenovo.
"Nexus supply will now presumably pass to Lenovo, which also gains an immediate entry into the US, Motorola’s major market, as well as key markets in Western Europe and Latin America," he said yesterday, noting that combined Lenovo, Motorola and Google have about six percent share of the 1bn smartphones that shipped globally in 2013.