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| A Lenovo smartphone just after unboxing |
The Vibe X presented by models at launch.
Lenovo has implemented an aggressive strategy to replace Samsung as mainland China's top smartphone manufacturer. It spent $793.5 million in Wuhan to build a plant that can produce 30 to 40 million phones per year. Data from Analysys International shows that Lenovo's China smartphone sales experienced considerable growth in 2012. Lenovo's market share increased to 14.2 percent during 2012's third quarter, representing an increase over 4.8 percent sales growth in the same quarter of 2011. IDC analysts said that Lenovo's success is due to its "aggressive ramping-up and improvements in channel partnerships. "Analysys International analyst Wang Ying wrote, "Lenovo possesses an obvious advantage over rivals in terms of sales channels." The company's CEO, Yang Yuanqing, said, "Lenovo does not want to be the second player ... we want to be the best. Lenovo has the confidence to outperform Samsung and Apple, at least in the Chinese market." The LePhone, as Lenovo smartphones are called in China, is offered at a relatively low price point and is customized for the Chinese market. The LePhone has benefited from strong support from Chinese mobile carriers and content providers such as Baidu, Alibaba, and Tencent.Having seen rapid growth in China’s smartphone market, Lenovo has begun making efforts to raise its share in the high-end market by cooperating with Taiwanese chip designer MediaTek Inc.According to IHS iSuppli, Lenovo was a top-three smartphone maker in China with a 16.5 percent market share in the first quarter of 2012. According to a May 2012 report released by IDC Lenovo ranks fourth in the global tablet market by volume.As of November 2012, Lenovo was the second largest seller of mobile phones in China when measured by volume.
Lenovo planned to release its smartphones in Nigeria in the second half of 2013 in an effort to find markets where it can sell directly to consumers. Lenovo picked Nigeria, because unlike South Africa and other African countries, there is no requirement to partner with a local telecom firm to sell its phones. Nigeria is Africa's second largest economy after South Africa. Lenovo will sell its phones across as many as six price segments with the most expensive selling for about US$500. Lenovo says it is investigating the rest of Africa and that Egypt will be its next target for expansion.
Lenovo is hosting an event in cairo on 12 August 2014 to celebrate lenovo smartphones launch in Egypt.
Lenovo began selling smartphones in Kazakhstan in November 2013.In the same month Lenovo announced that it would start selling phones in at least 20 new markets "in the next few quarters." Lenovo said these markets would include the Middle East, Africa, and Latin America. Yang Yuanqing said that Lenovo decided to accelerate its expansion after success in Indonesia where Lenovo achieved 13-percent market share in one year while achieving higher profit margins than it earns in China.
Lenovo sold about 50 million smartphones in 2013. The same year Lenovo increased its smartphone sales by 60% from 2012. Most of these sales took place in China where low and middle-end smartphones were still in great demand.
Lenovo has assembled a team of senior managers familiar with the Indian market, launched mobile phones at all price points there, and worked on branding and marketing in order to build market share. As of February 2014, Lenovo claims that its sales of smartphones in India have been increasing 100% per quarter while the market is only growing 15-20% over the same period. Lenovo did marketing tests of its smartphones in November 2012 in Gujarat and some southern cities, where Lenovo already had a strong presence. Lenovo's strategy has been create awareness, maintain a broad selection of phones at all price points, and developing distribution networks. Lenovo partnered with two national distributors and over 100 local distributors. As of February 2014, more than 7,000 retail outlets in India sold Lenovo smartphones. Lenovo has also partnered with HCL in order to set up 250 service centres in 110 cities.
In March 2014, Lenovo announced that it would release smartphones in the United Kingdom. Lenovo said that the launch would go forward regardless of whether or not its deal to purchase Motorola wins regulatory approval. As of March 2014, Lenovo was working with Vodafone and other carriers to ensure that its phones are compatible with their networks. Lenovo expects to release its first products intended for Britain at the IFA trade show in Germany in September 2014. Lenovo said that entering the British market would take about nine months due to the fact that most phones in the United Kingdom are sold with service contracts. Carriers have strict requirements for the phones they sell. Lenovo plans to use its current distributors, Exertis Micro-P, Ingram Micro, and Tech Data to sell its mobile phones.
In late April 2014, Lenovo announced that it projects selling 80 million smartphones worldwide in the fiscal year that began on 1 April. Lenovo said that it expects smartphones and tablets to drive its profits in 2014. Yang Yuanqing said, "We have to look outside China for a bigger market share and higher profit margins." He also stated that adding that its partnership with Google, owner of the Android operating system was getting stronger due to Lenovo's acquisition of Motorola Mobility.
Branding
The "Le" series of devices, including the LePhone, LePad, and the LeTV are sold under the "idea" brand outside of China. The LePhone is thus known as the "ideaphone" in other markets. The "Le" pre-fix means "happy" in Mandarin Chinese and this branding is only used in Mainland China.Lenovo signed an endorsement deal with Kobe Bryant in early 2013. Since then Bryant has made numerous appearances on behalf of Lenovo to promote its smartphones. Lenovo says Bryant was selected in order to further internationalize its brand while appealing to young consumers. Lenovo says that this is its main smartphone marketing campaign of the year in Asia.For its line of tablet devices, namely the Yoga Tablet, Lenovo hired actor and tech investor Ashton Kutcher to be its spokesperson and product engineer in 2013. Kutcher told Wired magazine :"Im an actual product engineer, and I know that’s hard for people to understand because so many of these [celebrity endorsement] relationships have been vanity products". While there were speculations regarding the actor's actual role at Lenovo, over whether we was indeed an employee working on all devices like its smartphones, or whether he was just a brand ambassador, it was however confirmed that he helped develop the Yoga Tablet as well as hosted the keynote introducing the tablet, but is not working on Lenovo's smartphones.
Mergers, acquisitions, and partnerships
Lenovo sold its mobile phone division in 2008 to focus on its personal computer business and then paid $200 million to buy it back in November 2009. Lenovo re-acquired its mobile division to focus on mobile internet devices such as smart-phones and tablet computers.Motorola
On 29 January 2014, Google announced it would sell Motorola Mobility to Lenovo for US$2.91 billion in a cash-and-stock deal. When Google and Lenovo first announced the acquisition of Motorola, they said the purchase would be funded with $660 million in cash, $750 million in Lenovo stock, and a $1.5 billion promissory note due in three years. As of February 2014, Google owns about 5.94% of Lenovo's stock. The deal includes smartphone lines like the Moto X and Moto G and the Droid Maxx. Lenovo also acquired the future Motorola Mobility product roadmap. Google will retain the Advanced Technologies & Projects unit and all but 2000 of the company's patents.Larry Page of Google said of the sale that "the smartphone market is super competitive, and to thrive, it helps to be all-in when it comes to making mobile devices. It's why we believe that Motorola will be better served by Lenovo—which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world."Yang Yuanqing stated that "the acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones."Yang also said, “Don’t be scared by the $1 billion-a-year loss. We will improve that even from day one. Google is very good at software, ecosystems and services. But we are stronger in the manufacturing of devices.” Yang said that Lenovo would make Motorola profitable within six quarters.
In March 2014, Yang Yuanqing said that Lenovo would continue using the Motorola brand name. Yang said that he wanted to exploit Motorola's reputation as an excellent manufacturer in North American and European markets. He used the term "mind share." Yang said that Lenovo planned to tie itself to Motorola in the minds of consumers with a tag line such as "Motorola by Lenovo" or "A Lenovo Company."As of May 2014, Lenovo was the fourth largest phone manufacturer in the world by unit sales, putting it behind Apple, Samsung, and Huawei. However, Lenovo owes most of its mobile market share to China. Lenovo believes that Motorola will help put it on the map as mobile device maker in developed markets such as the United States and Europe. Yang Yuanqing said, "Motorola is a good brand with worldwide awareness. This is the company that invented mobile phone, not just smartphones. Motorola will give us a good retail relationship. It has a strong portfolio of IP and rights and will help us become one of the clear global leaders. We will not be satisfied with number three, we will want to be number two in the future."
Lenovo had expressed interest in acquiring Motorola's hardware business immediately after it had been acquired by Google. Three years later, Lenovo's successful bid for Motorola Mobility began with a phone call from Eric Schmidt, asking if Lenovo was still interested in an acquisition. Lenovo immediately expressed interest. Liu Jun, an executive vice president at Lenovo in charge of mobile devices, said, "We first approached Moto when Google first announced the acquisition. Google was the owner of Android and we thought maybe it wouldn't want to own the hardware side of the business," said Liu Jun, EVP President of mobile for Lenovo to TechRadar. To us, it was clear that Google wanted to own the IPs. So we thought we had an opportunity to own the hardware side. Google initially tried to do the hardware itself but then a year and a half later they reconsidered their strategy. The end of last year we got a call from Google, from Eric Schmidt. We were asked if we still had the interest. We always thought Motorola was a good buy so we said yes and signed the contract quickly."
In April 2014, Lenovo announced that the first smartphone developed jointly with Motorola would be released in October or November of the same year.
Since the announcement of its acquisition by Lenovo, Motorola Mobility has focused on quickly increasing sales value through aggressive online promotions in the United States, Brazil, Mexico, and India. As of 2014, Motorola had increased its sales in India to at least one million smartphones each quarter through cooperation with the Indian e-commerce firm Flipkart.
As of November 2014, the Lenovo and Motorola brands held a combined 7.8% of global smartphone shipments, making Lenovo the third largest company in this market.Motorola is key to Lenovo's strategy of expanding abroad in order to escape slowing growth in the Chinese smartphone market. Lenovo plans to introduce Motorola's products in China where they will be positioned as a high-ends brand. Motorola's smartphones have a higher profit-margin than Lenovo-branded phones and will thus enhance earnings.
As of November 2014, Lenovo and Motorola were discussing how to use Lenovo's factories to manufacture some its phones. This would help reduce costs by allowing Motorola to use Lenovo's well developed supply chain to cut costs for components such as camera modules. This in turn could allow Motorola to enhance its products without raising prices.
NEC
In April 2014 Lenovo purchased a portfolio of patents from NEC related to mobile technology. These include over 3,800 patent families in countries around the world. The purchase includes standard essential patents for 3G and LTE cellular technologies and other patents related to smartphones and tablets.JD.com
In May 2014, Lenovo announced what it called a "strategic deal" with the Chinese e-commerce firm JD.com. Lenovo and JD.com signed a contract worth 12 billion Chinese yuan covering joint product development, marketing, internet-based promotions, post-sales logistics, and post-sales services. Lenovo launched its first phone designed as a platform for commerce, the S8, exclusively on JD.com on 28 April 2014. Lenovo plans to sell 5 million phones through JD.com in 2014.Operations
In May 2012 Lenovo announced an investment of US$793 million in the construction of a mobile phone manufacturing and R&D facility in Wuhan, China.In March 2014, Lenovo renamed its mobile device division to the Mobile Business Group. It was formerly known as the Mobile Internet and Digital Home Group.
Hardware and software
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| An early model LePhone charging |
Lenovo invested 100 million yuan in a fund dedicated to providing seed funding for mobile application development for its LeGarden online app store available for Chinese users. As of 2010, LeGarden had more than 1,000 programs available for download to users of the LePhone. At the same time, LeGarden counted 2,774 individual developers and 542 developer companies as members.
Lenovo uses MediaTek's turnkey chipsets that allow mobile phone manufacturers to focus on improved industrial design and software while reducing costs. As of November 2013, Lenovo has released four phones using MediaTek chipsets. Lenovo also has what it calls a "strong relationship" with Intel and Qualcomm.
Lenovo smartphones support the GSM standard, China's indigenous TD-SCDMA 3G standard used by China Mobile, the WCDMA 3G standard used by China Unicom, and China Telecom's CDMA 2000 network.
Lenovo-branded phones
K800
Lenovo unveiled the K800 smart phone at the 2012 Consumer Electronics Show in Las Vegas. The K800 uses an Intel Atom Z2460 processor which makes use of hyper-threading technology to increase its computing power. The K800 has a 4.5-inch display with 720p resolution. The K800's camera has 8-megapixel resolution. The demo model shown at CES in 2012 was running the Gingerbread version of Android.K900
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| K900Back |
The K900's camera is one of its distinctive features. It captures pictures with a resolution of 13 megapixels and has a large aperture f1.8 lens. The K900's lens allows it to take clear photos in low-light conditions without using a flash. The K900 was the first smartphone to use a f1.8 lens. The front-camera has a wide 88-degree viewing angle in order to make self-photos and video chat more convenient.
The K900 was designed specifically with emerging markets in Asia in mind. As of May 2013, Lenovo sells the K900 in China, India, Indonesia, Russia, the Philippines, and Vietnam. Lenovo plans to sell the K900 in ten additional markets by the end of the same year. Lenovo has hired professional basketball player Kobe Bryant to help promote the device in China and southeast Asia.
A820
The A820 is another popular dual-SIM smartphone, which in this case is equipped with an ARM Cortex-A7 MediaTek MT6589 CPU.The phone belongs to the A series which is an entry-level group of Lenovo mobile devices. But having a relatively fast 1.2 GHz quad-core CPU, 4.5 inch 540x960 (qHD) resolution IPS screen (although covered with a standard non-Gorilla glass) and 1 GB of RAM memory, made it a quite powerful product when released in March 2013. Lenovo A820 is quite popular in many countries, despite the fact that it is directly available only in China, India, Indonesia, Russia, the Philippines, and Vietnam. In a review for Mobile Network Comparison the author summarized that Lenovo A820 "offers incomparable value compared to almost any phone available on British high streets".Vibe X
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| LenovoVibeXCamera |
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