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Lenovo brings Motorola back to China as Moto X phone released

[BEIJING] Lenovo Group Ltd reintroduced the Motorola brand in China on Monday, unveiling the Moto X smartphone and four other devices to regain market share lost to Xiaomi Corp.

The Moto X is retailing online for 3,299 yuan (US$527), while the Moto G phone will cost 1,299 yuan when it's released Feb 10, the company said at a press conference in Beijing. Motorola also plans the Moto X Pro phone, Moto 360 smartwatch and Moto Hint wireless earbud headphones, said Rick Osterloh, president of the Lenovo unit.

Lenovo, the world's largest maker of personal computers, is expanding into mobile devices to fend off competition from Chinese rivals Xiaomi and Huawei Technologies Co at home and abroad.

The US$2.9 billion purchase of Motorola Mobility from Google Inc in October gave Lenovo an established global brand and a technology licensing agreement with Google to help boost sales.

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"The market is so competitive that it's hard to think about only one competitor," Mr Osterloh said in an interview. "If you focus on competitors, you're going to go astray. The focus is squarely on consumers."

Lenovo is re-establishing the Motorola brand in the biggest smartphone market after a two-year absence. China also will be the first country in Asia to get the Moto Maker Service that lets users buy select custom materials for their phones, Mr Osterloh said.

Xiaomi, established less than five years ago, more than tripled its share of smartphone shipments in China to a market- leading 16 per cent in the three months ended September, from 5 per cent a year earlier, researcher Canalys said in November. While Lenovo maintained its 13 per cent share, its ranking fell amid Xiaomi's gains.

Globally, Xiaomi became the world's third-largest smartphone vendor for the first time in the third quarter, with a share of 5.3 per cent, IDC reported in October. Samsung and Apple Inc led the industry, while Lenovo was in fourth place with 5.2 per cent, IDC said.

With the hype surrounding the Xiaomi brand, Xiaomi can "charge more and offer something better for a higher price," Alberto Moel, a Hong Kong-based analyst at Sanford C. Bernstein & Co, said before Monday's event.

"Lenovo is thinking that is a better, more sustainable model, and Motorola is an entry point into a strategy of better pricing."

Lenovo expects to replace Xiaomi in the No 3 spot with the inclusion of Motorola and sell more than 100 million units, Liu Jun, president of Lenovo's Mobile Business Group and chairman of the Motorola unit, said on Monday.

The company has begun to have some success using multiple brands, Mr Liu said. For example, in India, the company already uses the Motorola brand online and Lenovo-branded devices for sales offline, he said in an interview in Las Vegas this month. The company could pursue a similar strategy at home, he said.

Lenovo chief executive officer Yang Yuanqing is betting the Motorola name and history can help Lenovo move up the value chain with Chinese consumers.

Mr Yang fondly recalls his first mobile phone from the early 1990s: a Motorola DynaTac similar to the one used by the character Gordon Gekko in the 1987 film "Wall Street."

"It was like a brick," Mr Yang said in a Jan 13 interview. "Still, it was definitely the premier brand. It was very respected then."