Deleting the Vibe line won’t help Lenovo or Motorola

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Last week it was speculated that Lenovo would drop the Vibe line to avoid cannibalizing Motorola’s sales. The company has since stated that the Vibe line has not been shut down, and to be honest, the idea seemed wrong at first.

More than three years after Google bought Motorola for $12.5 billion, the company changed hands for the second time last year and was acquired by Lenovo for $2.9 billion. People believed that the move made sense for Lenovo as an attempt to gain popularity in international markets where Motorola was a popular phone brand. On the other hand, Lenovo was considered to be the only computer manufacturer in many countries of the world outside of its home country, China.

At the time of the acquisition, Lenovo Chairman Yang Yuanqing said it would help make the company a global competitor in the smartphone segment. The acquisition also added nearly 2,000 patents to Lenovo’s portfolio.

Tech enthusiasts soon began to question this decision, but Lenovo and Motorola had competing phones in roughly the same price segment. People have been wondering if Moto phones will start eating Lenovo phone sales or vice versa.

We raised this question a few months ago at a joint event between Lenovo and Motorola. A Lenovo representative then explained to us that the two brands have their own characteristics and both eat into each other’s market. This was repeated at the recent joint event, but the speculation has not died down yet.

The speculation began after a Lenovo executive announced that the Vibe line would be discontinued. This was reported by Canalys, a market research company, which then claimed that it was the Vibe range Killed to make way for Motorola in segments above the middle.

He also said it would help simplify Lenovo’s portfolio and reduce cannibalization. However, in a statement emailed to Gadgets 360, Lenovo clarified that the Vibe line will live on. “Vibe remains an important Lenovo mobile phone brand. We plan to continue and expand the franchise in selected markets around the world,” said a company representative.

But does this move make sense? If we compare the Lenovo and Motorola smartphones currently available in the market, we can see the different approach of the two brands. While Lenovo phones are available in various price segments, Motorola is present with very few devices and in a narrow price range.

At the launch of the Moto X Play in September, Motorola claimed to have sold 5.6 million handsets in India since its return to the market. Of the 5.6 million units, 2.6 million were sold between February and August this year, the majority of which were Moto G and Moto E smartphones. Since returning to India, Motorola has introduced two Moto Es and three Moto Gs and a Moto X; it also sells the Moto 360, all of which are sold through Flipkart.

The Lenovo K3 Note was also sold exclusively through Flipkart, and the company said in September that it had sold over 500,000 K3 Note phones in less than two months in India.

But that’s where the similarities end. While Motorola phones are marketed on the basis of ‘near Android’, Lenovo Vibe phones all have different USPs that set them apart. Lenovo Vibe P1 and Lenovo Vibe P1m were recently launched at Rs. 15,999 and Rs. 7999 powerhouses with 4900 mAh and 3900 mAh batteries respectively.

The Lenovo Vibe S1, on the other hand, has dual cameras and is aimed at the selfie audience. The price is Rs. 15,999, it comes with 8-megapixel and 2-megapixel front cameras. The Vibe Shot is another camera-focused smartphone priced at Rs. 25,499, it packs a 16-megapixel rear camera with six-piece modular lens, BSI sensor and tri-color LED flash.

With that in mind, it’s hard to say how the two brands’ products ate up the other’s sales. Given the success of both brands, that doesn’t seem to be the case anyway. In July, Lenovo Group ranked among the top five smartphone vendors in terms of global shipments, according to research firm International Data Corporation (IDC). Together, Lenovo and Motorola saw 24.3 million smartphone shipments last year and held an 8 percent market share.

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The company also achieved similar results in the Indian market, with Lenovo Group (Lenovo + Motorola) becoming India’s fifth largest smartphone vendor in Q2 2015 with a market share of 6%. The IDC report added that Lenovo (along with Motorola) generates most of its sales through online channels. In a recent report on 4G smartphone shipments in India, Lenovo Group was the fourth largest vendor of 4G-enabled smartphones with a market share of 9.5%.

With that in mind, it’s clear that the two brands don’t eat into each other’s space, and it makes little sense to suggest that Lenovo should kill off its Vibe line when there are no outward signs of that need. It’s no surprise that Lenovo has announced it won’t kill the Vibe range; It is surprising that the question was asked.

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