Lenovo’s acquisition of Motorola could be bad news for Indian mobile phone brands currently dominating the Android market.

The deal comes at a time when Indian phone makers, including Lava and Karbonn, are trying to transition from the cheap low-end feature phone segment to the mid-end smartphone space with slew of devices in the ₹10,000-15,000 price.

This is a segment where Motorola has been strong player. For example, it is launching its latest devices Moto G in the next couple of weeks priced at around ₹15,100. But over the past 3-4 years, Motorola had lost steam in the Indian market as its fortunes slipped globally. Now with Lenovo’s backing, brand Motorola could make a come back into the Rs 7,000 crore domestic phone market.

“The Lenovo acquisition is probably aimed at making the company a one-stop provider for all computing needs from PC to tablets and now smartphones. Lenovo has mentioned that it is pretty serious about its phone business and looking to replicate its China success in nascent markets like India,” said Manasi Yadav, Senior Analyst, (Phones/ Tablets), IDC.

Back in 2005, Motorola was among the first vendors to take mobile phones to the masses in India with a device priced at ₹1,700. That was when the American brand was ruling the mobile phone world along with Nokia. But then came the technology shift powered by the likes of Apple and Samsung.

From an iconic market leader, Motorola was almost relegated to the pages of history. Then Google acquired the company breathing some life back with some really powerful Android devices such as the Moto G. But the problem is that though Google had the technology and money to resurrect Motorola, it did not have the marketing and distribution reach, especially in markets like India.

Late entrant

Lenovo, a late entrant to the mobile phone space, has been trying to get a foothold into the Indian smartphone market since it launched its devices a year ago. Despite having an aggressive intent, Lenovo has so far not been able to make a dent.

Now with Motorola brand in its kitty, the Chinese phone maker could give a run for the money not only to the Indian players but also to market leader Samsung.

However, the benefits that Lenovo would acquire out of this deal and extend to its serving markets, including India, are not going to be instant. “Its going to take some time to leverage from the competencies gained and I see it a medium-to-long range benefit for Lenovo in India. The company is already in the market and definitely among the ‘brands to watch’ at the moment,” said Faisal Kawoosa, Lead Analyst, Telecom Practise, CyberMedia Research.

Indian Android phone makers are putting a brave front for now. S.N. Rai, Co-founder and Director, Lava Mobiles, said, “There wouldn't be any impact to us because we have multiple devices on Android already and companies such as Lenovo have been fighting in the smartphones market (in India). We are already winning the game while they are still fighting.”

Rai said the only impact would be that Lenovo might play big on Nexus brand (of Google), but it is still early to say anything, just like nobody knows what will happen to Nokia post the Microsoft deal.

“We have advantage of localisation and local manufacturing, which are being adopted well by customers and also we have better margin on pricing whereas the MNCs do not have much,” he said.

New models on cards

Indrajit Sabharwal, Managing Director , Simmtronics, said they are planning to launch new models with leading chip-set makers of the world to compete with MNC brands.

“The idea being that if we also start making our products tech-savvy enriched with latest technology, software and much more, like other MNC brands then there is hardly any threat from them,” says Sabharwal.

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