Lenovo to make six mn handsets in India

Lenovo, which owns the Motorola smart phone brand, has started local assembly of the phones through contract manufacturer Flextronics' facility near Chennai, bringing its production base nearer to Indian consumers (See: Lenovo starts manufacturing Lenovo, Motorola smartphones in Chennai).

Lenovo, which currently sells the smart phones exclusively through a tie-up with e-tailer Flipkart, plans to market these devices through retail stores across the country.

Lenovo plans to aggressively expand operations in India to boost the group's share in the smart phone business beyond 6 per cent at present in one of the most crucial markets globally.

Lenovo plans to follow a dual-brand strategy in India as it launches devices under the Motorola and Lenovo badges. While Motorola will be positioned as an international and premium brand, Lenovo will be entry and mainstream.

Motorola will use the distribution network of Lenovo, which currently sells through 10,000 multi-brand retail outlets. It also plans to tie up with major electronics retailers such as Chroma and Reliance Retail.

Under the tie-up with Flextronics unit at Sriperumbudur, Lenovo has already started rolling out two variants of the Moto E smartphone. It is also planning to assemble 4G device - Lenovo K3 note.

The Flextronics unit has a capacity to make six million units annually. Both Lenovo and Motorola will have separate manufacturing lines at the facility, which will house 1,500 employees.

India is the world's fastest growing smart phone market and most of the over 100 different phone companies sold in the country are imported from China and Taiwan.

India is a relatively bright spot for Lenovo, the world's biggest maker of PCs, which has struggled with its $2.9-billion acquisition of Motorola handset division from Google.

In India, however, Lenovo is the only China-based company to rank among top five smart phone vendors, capturing 6 per cent of the market with its Lenovo and Motorola brands, according to figures from IDC.

Smartphone shipments to India jumped 44 per cent to 26.5 million units in the second quarter this year from the same period a year earlier, IDC said.