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Lenovo adopts dual-brand strategy

News, 11 January 2016

BEIJING/LAS VEGAS: Lenovo, the Chinese smartphone manufacturer, is phasing out the Motorola brand that it acquired from Google in 2014 in favour of a dual-brand strategy that is likely to be underpinned by increased marketing spend.

"We'll slowly phase out Motorola and focus on Moto," Rick Osterloh, the president and chief operating officer at Motorola Mobility, told CNET.

Moto will be the focus of the company's premium level smartphones – the actual branding will be "Moto by Lenovo", with the existing stylised 'M' being retained – and lower-priced products will appear under the Vibe name.

Lenovo is also looking to ramp up its overseas expansion with the CEO having identified Brazil and India as likely markets for growth to offset a slowdown in China.

There were mixed views, however, on how the strategy would play in Lenovo's home market.

"The key for Lenovo is how to differentiate user experience against competitors, such as Apple and Huawei, in the high-end smartphone market segment," Charlie Dai, an analyst at Forrester Research, told the South China Morning Post

"I believe that Motorola is still a great brand name for many buyers, especially in China," he added.

Even if that is the case, significant marketing investment may be needed according to Bryan Ma, a vice president at research firm IDC.

"If Lenovo wants Moto as its flagship smartphone brand then it needs to invest a lot in terms of making that brand visible in its home market, where the competition is heated against other Chinese brands," he said.

An alternative view came from Alberto Moel, a senior analyst at Bernstein: "I'm not sure brand matters much in smartphones outside of Apple," he said.

He suggested that the Motorola connection was more important for the design and engineering capability it brought. "How far the brand takes them is just the icing on the cake," he added.

Data sourced from South China Morning Post, Bloomberg, CNET; additional content by Warc staff