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Mumbai: Motorola Mobility Llc is banking on the success of its two Android-based mobile phones, Moto G and Moto X, to boost its market share in the highly competitive and rapidly growing smartphone segment in India, said a senior company official on Thursday.

In India, Motorola has tied up exclusively with online retailer Flipkart.com to sell these two models, one of the very few companies using the Internet-only business model. It launched Moto G in January and Moto X this month.

Of India’s 1.2 billion population, only around 200 million are Internet users, yet the gamble of selling online is paying off for the company, according to Magnus Ahlqvist, corporate vice-president (strategy) of Motorola Mobility’s EMEA and APAC regions.

“We have a very strong proposition at an exceptional price. We don’t give out sales numbers but the performance of Moto G has been way beyond our expectations," said Ahlqvist in a phone interview on Wednesday.

Industry analysts agree.

“They’ve sold about 250,000 Moto G handsets so far. That’s a real good number for a product that was launched just six weeks back. I believe the price point is working for them," said an analyst, who did not want to be named.

The 16 GB variant of Moto G is priced at 13,999 and the 8GB at 12,499 on Flipkart.

Ahlqvist, who joined Motorola Mobility in August, declined to comment on the veracity of these numbers.

On 6 February, Mint reported that the 16 GB variant of the Moto G phone launched that day was “sold out" within the first 15 minutes, and another set of 16 GB variant offered 12 hours later also ran out of stock within an hour.

A Flipkart spokesperson then said the Motorola exclusivity was a long-term one, which Ahlqvist confirmed.

On 19 March, Motorola introduced Moto X in India, again exclusively on Flipkart, priced between 23,999 and 25,999. “Moto X has been very well-received across markets and would continue to add to Motorola’s momentum in India," said Ahlqvist.

Motorola Mobility plans to introduce Moto 360—a smartwatch designed by Motorola and powered by Android Wear (extending Android to wearables like Google Glass, smartwatches, etc.)—globally in the second half of 2014, according to a blog post by the company.

Ahlqvist didn’t say when the Moto 360 will be introduced in India.

Motorola Mobility’s smartphone business is in the process of being acquired by the world’s largest personal computer maker China-based Lenovo Corp. On 29 January, Google Inc. said it will sell the business to Lenovo for $2.91 billion. It had acquired Motorola for $12.5 billion in 2012.

According to a 29 January report by Strategy Analytics, the combined entity of Lenovo and Motorola accounted for a 6% share of global smartphone shipments in 2013.

As a result of this new deal—assuming it is approved by the US, Chinese and other authorities—Lenovo-Motorola “becomes instantly the world’s third-largest smartphone vendor by volume, behind Samsung Electronics Co. Ltd (32%) and Apple Inc. (15%)".

According to research firm International Data Corporation (IDC), India currently sells around 40 million smartphones annually, a number that is forecast to touch 155 million in 2017.

Lenovo’s market share in India is negligible (less than 5%) currently, with the market dominated by Samsung, Micromax and Karbonn, according to research firm Convergence Catalyst. Samsung has more than a 30% share, Micromax has about 22% and Karbonn about 12%. According to the research firm, 41-43 million smartphones were sold in India in 2013.

With the Motorola acquisition, Lenovo will gain in India too where it was a latecomer in the smartphone segment, having introduced its first phones sometime in 2012.

“But for that to happen, Motorola too will have to have launched a few more models. It cannot sustain its success with just two models," said Jayanth Kolla, co-founder and partner at Convergence Catalyst.

Ahlqvist agreed that the online-only sales model “could be questioned even as we remain committed to it" but added that Motorola hopes to “broaden its offerings of models in the three-six months even as we remain extremely disciplined when it comes to launching new models".

In 2014, Convergence Catalyst estimates smartphone sales to reach 60 million, forming close to 35-40% of the total annual mobile handset sales in the country.

Trends such as Flipkart’s exclusive partnership with Motorola for selling Moto G and Snapdeal’s exclusive partnership with Intex for selling Aqua Octa are expected to intensify in 2014, according to Kolla.

Online retailers have emerged as a strong distribution channel for smart devices, especially smartphones, in the country, he said.

“Their no-frills operations (of e-commerce firms), lean supply chain, direct access to consumers and growing brands (of some of the leading firms) make them the preferred partners for many smartphone OEMs (original equipment manufacturers)," said Kolla.

ABOUT THE AUTHOR

Leslie D'Monte

Leslie D'Monte has been a journalist for almost three decades. He specialises in technology and science writing, having worked with leading media groups--both as a reporter and an editor. He is passionate about digital transformation and deep-tech topics including artificial intelligence (AI), big data analytics, the Internet of Things (IoT), blockchain, crypto, metaverses, quantum computing, genetics, fintech, electric vehicles, solar power and autonomous vehicles. Leslie is a Massachusetts Institute of Technology (MIT) Knight Science Journalism Fellow (2010-11). In his other avatar, he curates tech events and moderates panels.
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