Lenovo rolling Motorola back into China market

The last quarter of 2014 was the first one in which Motorola became fully integrated with Lenovo. Motorola shipped more than 10 million units in that quarter, up by 118 percent year-on-year, according to Lenovo. The better-than-expected sales also added $1.9 billion in revenue.

Nicole Peng, research director at Canalys China, said: "Motorola's continuously improving performance and brand position in 2014 proved that it was a good investment decision for Lenovo a year ago."

Meanwhile, Lenovo's smartphone business also have achieved good results in overseas markets such as Central and Eastern Europe and Southeast Asia in a short period of time, said Peng.

But before Motorola could grab market shares in developed markets such as the US and Europe, it should stop losing money as soon as possible.

Yang, Lenovo's chief executive, reiterated this month that Motorola will return to profit in at most six quarters from now. The brand's performance in China and other emerging markets such as India will also play a critical role in this strategy.

"The challenge for Lenovo is to continue to drive the momentum of the Motorola brand while finding the sweet spot for the Lenovo brand," according to Peng.

Lenovo is aiming to get back to the top position in the Chinese smartphone market with the help of Motorola. Before Motorola re-entered China, Lenovobranded smartphones had been wrestling with competitors such as Xiaomi Corp and Huawei Technologies Co Ltd. Although Lenovo was the largest local vendor for a while, it was quickly surpassed by redhot startup Xiaomi.

Peng said this year is a critical one for Lenovo as its dualbrand strategy has yet to be proven successful.

"There are opportunities this year for Motorola in China in the medium-high end market, despite Apple's strength. Lenovo has some complex decisions to take to ensure its product portfolio does not compete with the Moto or Lenovo brand," she said.

Lenovo's own devices will cover low and medium-end customers while Motorola will rival Apple and Samsung Electronics Co Ltd in markets above 3,000 yuan.