Lenovo smartphones are marketed as the “LePhone” in Mainland China and the “IdeaPhone” overseas. Motorola Mobility, ZUK Mobile and Medion, divisions of Lenovo, sell smartphones under their own brands. As of September 2015, Lenovo is in the process of rebranding most of its phones using the Motorola brand name.
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% during 2012’s third quarter, representing an increase over 4.8% 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.”
Lenovo’s strategy for Lenovo devices dictates an emphasis on its home market of China and emerging markets such as Russia, Indonesia, India, and the Middle East. Lenovo planned significant product releases in those markets in 2013. Lenovo is pursuing this strategy due to its thin pre-tax profit margin of only 2.6%.
The LePhone, as Lenovo smartphones were called in China, is offered at a relatively low price point and is customized for the Chinese market. The LePhone 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 efforts to raise its share in the high-end market by cooperating with Taiwanese chip designer MediaTek in 2012. According to IHS iSuppli, Lenovo was a top-three smartphone maker in China with a 16.5% 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. In November 2012, Lenovo became 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. Lenovo will sell its phones across as many as six price segments.
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. Lenovo decided to accelerate its expansion after success in Indonesia where Lenovo achieved 13% 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