Is it More Competitive for OEM Mobile Phone Business after Lenovo’s Entry?

Friday, September 25, 2015

Recently, a report said that Lenovo, which is a top China mobile phone brand and has considerable smartphone manufacturing facilities but has failed to make a major dent in the market, has decided to become an original equipment manufacturer (OEM) and make its own.

In 2014, Lenovo acquired Motorola from Google with a lot of mobile industry patents, but the shipment of two brands, both Motorola and Lenovo, has been declining, because the strong competition from rivals like Huawei, Xiaomi, LeTV and Meizu and the overlay in production between Lenovo and Motorola.

After seeing a loss of $282 / €250 million in the second quarter of 2015, Lenovo has devised a restructuring plan for its handset business. At the end of August, Lenovo has decided to let Motorola team to lead the design, development and manufacturing of Lenovo’s smartphone series. And stepping into OEM smartphone business is part of the restructuring plan.

Lenovo also expresses that the mobile department will do three main things in the next. The first thing is to make competitive smart phones; the second is to achieve the profit increase, not just the pure sales and expand of mobile phone market share; the third one is to integrate the supply chain and improve the productivity to utilize the advantages of two brands, Lenovo and Motorola, and bring into play in separately industry.

The report also said that Lenovo’s entry into the OEM mobile phone business would strongly impact on the smartphone OEM ecosystem and its production partners like Compal Electronics and FIH Mobile.

This might be true partly. We need to admit that the competition for an OEM order is really fierce. However, not all OEM mobile phone manufacturers would be influenced by Lenovo’s entry into OEM smartphone business. For other OEM phone suppliers who are aiming at providing OEM phones for phone brands that can’t afford to place an OEM order with Lenovo, they don’t need to be anxious about this new, as they are positioning themselves for different smartphone markets.

OEM , smartphone , mobile phone , Lenovo , Motorola , Xiaomi , Meizu , Huawei