Lenovo CEO: Our smartphone product portfolio was not the most appropriate for India

It says a lot about a company when its people in charge don’t shy away from accepting their oversights. Yang Yuanqing, chairman and CEO of Lenovo, one of China’s biggest technology companies, admits the firm made “mistakes” in the smartphone business in India.

“About two years ago we tried to combine the two brands (Lenovo and Motorola) into one Moto brand for the India market. That was not the correct decision. Both Moto and Lenovo brands could be very complementary for a market like India,” said Yuanqing at a round-table conference in Bengaluru on Thursday evening. In 2014, Lenovo bought smartphone brand Motorola from tech giant Google for $2.91 billion.

“After we combined the two brands, our team was focussing more on Latin America and North America. But the cost structures in those markets and in India are very different. Our product portfolio was not the most appropriate for India. That is where we went wrong. We will now definitely correct these mistakes and relaunch our product in the India market.”

India is one of the world’s largest smartphone markets estimated at $8 billion. The Beijing-based company, which sells smartphones in India under its Motorola and Lenovo brands, is struggling to stay ahead of aggressive competition from Chinese manufacturers. Over the last few years, Lenovo’s Chinese peers such as Xiaomi, OnePlus, Vivo, and Oppo have come to control about 51% of India’s smartphone market. According to reports, Lenovo’s (including Motorola) marketshare is less than 3% today.

Yuanqing pointed out that there is room for improvement in the smartphone business. “We made some mistakes in the product, but definitely we will not give up this market. We have redesigned our product specifically for the Indian market.” Lenovo is aiming for a big bang launch of its smartphones under its Lenovo and Motorola brands in different price categories.

The company said that in the last one year it has been working on increasing its smartphone sales point. Lenovo has 700 Motorola branded stores (Moto hubs) across India. “Our target is to have close to 1,000 such Motorola stores by the year end. This is something we didn’t do earlier to reach out to customers. We were not available in many places,” the company added.

India is the only market where the Chinese company sells smartphones under the Lenovo and Motorola brands. Lenovo focusses on technology and price while Motorola focusses on innovation and new tech experiences.

“We can position Moto (Motorola) in the offline space as a premium brand in India. And Lenovo in the online market positioning more as an entry level and mainstream brand. For Lenovo, we plan to sell more through the online channels. Now we have a clear branding strategy for both the products and a much stronger product portfolio targeted mainly towards the Indian consumer,” said Yuanqing.

“With a better product portfolio we can win back marketshare in the smartphone business. In the next two-three years, we will have a similar kind of success for our smartphone business like how we had in the PC (personal computer) business,” Yuanqing added.