Technology: Out Of Google's Orbit, Motorola Surges And Sets Sights On China and Xiaomi - Welcome to: Naija Rebrander Blog Welcome to: Naija Rebrander Blog: Technology: Out Of Google's Orbit, Motorola Surges And Sets Sights On China and Xiaomi

Thursday, 5 February 2015

Technology: Out Of Google's Orbit, Motorola Surges And Sets Sights On China and Xiaomi

With 1.3 billion units sold last year, the smart phone market is not only enormous, it’s also one of the most dynamic and competitive businesses on earth.

Few people know this better than Rick Osterloh, the president and chief operating officer of Motorola. When Google bought the company in 2011 for $12.5 billion, Motorola was a tarnished brand that was pining for the days when its Razr cell phone was synonymous with innovation. Now, after its first quarter under Lenovo ’s ownership, Motorola appears to have gotten its mojo back.

“We had a fantastic quarter,” Osterloh said in an interview with Forbes. This week, the company reported that its fourth quarter revenue grew 118% from a year earlier, as it sold more than 10 million units. Among the major smart phone sellers, only Chinese sensation Xiaomi grew faster, with a 178% surge in shipments, according to IDC. (Motorola’s results, as well as strong sales of Lenovo-branded mobile devices and PCs, helped the Chinese electronics giant beat forecasts, sending its shares up more than 13% in two days.)

Now Osterloh is gearing up for battle with Xiaomi – not to mention Apple and Samsung – in the world’s largest smart phone market. On
Thursday, it begins selling the Moto X, Moto X Pro, Moto G and other models in China. “You can’t be a global smart phone player if you are not big in China,” Osterloh said.

A measure of success in China may be the missing piece for Motorola to be able to claim that a turnaround that began under Google’s ownership is finally complete. But succeeding there won’t be easy. Apple has cornered the high end of the market as its Greater China sales, which include Hong Kong and Taiwan, surged 70% in the most recent quarter. Meanwhile, while Samsung appears to have lost some momentum, it remains a formidable player.

But it’s perhaps Xiaomi that will represent the biggest challenge for Motorola, as the two battle in the market for high-end devices at mid-range prices. The company is the hottest startup in China, with a market value of $46 billion. With savvy marketing and online sales through fan-clubs, Xiaomi rocketed to become the No. 1 seller of smart phones in China in just four years, before Apple edged it out of the top spot in the fourth quarter.

Osterloh is confident that that Motorola’s brand, which was first introduced in China in 1987 but exited the country several years ago, remains strong there. And he is counting on Lenovo’s massive distribution clout to give his company a leg up. (Lenovo dominates the low end of the smart phone market in China, and has long been the country’s largest seller of PCs. It has a massive network of retail stores and resellers throughout the country.)

“We get to take advantage of the vast scale of Lenovo in China,” Osterloh said. “It’s an amazing opportunity for us.”
Source: Forbes

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