This Q&A first appeared in dna of money edition on March 12, 2015.
Marcus Frost, senior marketing director, EMEA & APAC, Motorola Mobility UK Ltd, was in Mumbai to discuss the company's journey in India post being acquired by Lenovo, smartphone sales in the last four quarters, new line of products, the changing definition of value-for-money in the Indian affordable smartphone category etc. Edited excerpts...
Motorola has come a long way from being itself to being a part of Google and finally getting acquired by global IT hardware major Lenovo. Are things better now than before?
We feel super strong and it couldn't have come at a better time. While Motorola is strong in certain geographies globally, association with Lenovo makes it more stronger now. It has got us ready for our part of the journey now where we need scale. Google doesn't make things while Lenovo makes a ton of things thus giving us major supply-chain efficiencies and that value we are able to transfer immediately to the consumer. The products being developed and conceived are very different what we they were before and after the acquisition. You will see more value and choices coming from us going forward.
You would also be competing with Lenovo for the same set of consumers now?
It is highly complimentary than competition. We were about 5% share and Lenovo was about 2-2.5% so together we are about 8% market share. So we have another 92% to take care of rather than cannibalising each other.
It's been a year now operating as part of Lenovo now. How has the journey being?
The journey has started well with Moto G. Since all consumer expectations couldn't be met with just one product we introduced Moto E targeting the affordable smartphone segment. In the hi-end category, we launched the Moto X followed by the wearable technology in the form of Moto 360. Now we have got into new generation products with the Moto E 2nd generation smartphones. This smartphone has been bundled in a way to that will change the idea of affordable handsets while still being classy. The market is changing fast and so are consumer preferences not only in India but globally. So we will keep innovating not only in terms of products but also the marketing strategies, service levels etc.
How has market responded to the products? Could you share sales numbers?
Last year in February is when we started operating under Lenovo and we have received a very overwhelming market response for our products. In the last ten-and-a-half months we have sold three million handsets, which is a testimony of how well the brand is being received.
That's a good number? Does it meet company expectations?
It's a great number to write home about. Also a validation of the focus we have had on what the Indian consumer wants. And efforts are being made to ensure we are delivering on that.
Given the kind of products that are likely to be introduced, can this number easily double in the next 12 months?
We are not chasing numbers or for that matter market share at the moment as the focus is more on delivering innovation, value and choice to the consumers. Besides, it's never so easy to double the numbers. The way we look at it is, if we keep doing the right things this year like we did in 2014 the numbers should happen. While we don't really know what that right number is but we wouldn't want to stop just there and possibly exceed that figure. It all depends on how the entire ecosystem shapes up as well but our aim is to keep on doing the right things.
On the market share part, all I can say is that Motorola and Lenovo put together is the third largest vendor across the world and we are the only viable challenge to number one and number two. In India the story is pretty much the same.
A broader distribution as against the Flipkart only way of reaching out to customers could help reach / exceed that right number?
Online-offline put together, Flipkart is the largest retailer reaching out to 25,000 pincodes in India. E-commerce works for us as our forecasting ensures that Moto products never go out of stock. We also don't do flash sales because if someone is keen on buying a Motorola device what right have I got to stop him / her from doing so. I cannot, not offer consumers a choice.
While the Rs 10,000 to Rs 15,000 bracket was a major play for smartphone makers, the sweet-spot seems to be moving south to Rs 5,000 to Rs 10,000 now.
There are different needs from different sets of consumers and just one product will never be able to meet those needs. We are definitely trying to drive value and hoping to move it down and down the change and that's exactly what the Moto E 2nd generation does.
Any plans to join the “Make In India” movement announced by prime minister Narendra Modi?
We do keep evaluating the option but there is nothing happening on that front right now. The reason being that, what you see is a price side of the economics, but if you see the supply side of the economics it may not necessarily make sense.
Xiaomi was to launch own online sales platform in India. Would you be looking at a similar option?
While there are multiple options to explore and that is what the strategy team does, but there is nothing right now that we have finalised on.
Marcus Frost, senior marketing director, EMEA & APAC, Motorola Mobility UK Ltd, was in Mumbai to discuss the company's journey in India post being acquired by Lenovo, smartphone sales in the last four quarters, new line of products, the changing definition of value-for-money in the Indian affordable smartphone category etc. Edited excerpts...Motorola has come a long way from being itself to being a part of Google and finally getting acquired by global IT hardware major Lenovo. Are things better now than before?
We feel super strong and it couldn't have come at a better time. While Motorola is strong in certain geographies globally, association with Lenovo makes it more stronger now. It has got us ready for our part of the journey now where we need scale. Google doesn't make things while Lenovo makes a ton of things thus giving us major supply-chain efficiencies and that value we are able to transfer immediately to the consumer. The products being developed and conceived are very different what we they were before and after the acquisition. You will see more value and choices coming from us going forward.
You would also be competing with Lenovo for the same set of consumers now?
It is highly complimentary than competition. We were about 5% share and Lenovo was about 2-2.5% so together we are about 8% market share. So we have another 92% to take care of rather than cannibalising each other.
It's been a year now operating as part of Lenovo now. How has the journey being?
The journey has started well with Moto G. Since all consumer expectations couldn't be met with just one product we introduced Moto E targeting the affordable smartphone segment. In the hi-end category, we launched the Moto X followed by the wearable technology in the form of Moto 360. Now we have got into new generation products with the Moto E 2nd generation smartphones. This smartphone has been bundled in a way to that will change the idea of affordable handsets while still being classy. The market is changing fast and so are consumer preferences not only in India but globally. So we will keep innovating not only in terms of products but also the marketing strategies, service levels etc.
How has market responded to the products? Could you share sales numbers?Last year in February is when we started operating under Lenovo and we have received a very overwhelming market response for our products. In the last ten-and-a-half months we have sold three million handsets, which is a testimony of how well the brand is being received.
That's a good number? Does it meet company expectations?
It's a great number to write home about. Also a validation of the focus we have had on what the Indian consumer wants. And efforts are being made to ensure we are delivering on that.
Given the kind of products that are likely to be introduced, can this number easily double in the next 12 months?
We are not chasing numbers or for that matter market share at the moment as the focus is more on delivering innovation, value and choice to the consumers. Besides, it's never so easy to double the numbers. The way we look at it is, if we keep doing the right things this year like we did in 2014 the numbers should happen. While we don't really know what that right number is but we wouldn't want to stop just there and possibly exceed that figure. It all depends on how the entire ecosystem shapes up as well but our aim is to keep on doing the right things.
On the market share part, all I can say is that Motorola and Lenovo put together is the third largest vendor across the world and we are the only viable challenge to number one and number two. In India the story is pretty much the same.
A broader distribution as against the Flipkart only way of reaching out to customers could help reach / exceed that right number?
Online-offline put together, Flipkart is the largest retailer reaching out to 25,000 pincodes in India. E-commerce works for us as our forecasting ensures that Moto products never go out of stock. We also don't do flash sales because if someone is keen on buying a Motorola device what right have I got to stop him / her from doing so. I cannot, not offer consumers a choice.
While the Rs 10,000 to Rs 15,000 bracket was a major play for smartphone makers, the sweet-spot seems to be moving south to Rs 5,000 to Rs 10,000 now.
There are different needs from different sets of consumers and just one product will never be able to meet those needs. We are definitely trying to drive value and hoping to move it down and down the change and that's exactly what the Moto E 2nd generation does.
Any plans to join the “Make In India” movement announced by prime minister Narendra Modi?
We do keep evaluating the option but there is nothing happening on that front right now. The reason being that, what you see is a price side of the economics, but if you see the supply side of the economics it may not necessarily make sense.
Xiaomi was to launch own online sales platform in India. Would you be looking at a similar option?
While there are multiple options to explore and that is what the strategy team does, but there is nothing right now that we have finalised on.
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