How China-owned Motorola is looking to sway LatAm corporates

With a new business unit and commercial strategy, smartphone manufacturer Motorola, controlled by China's Lenovo, seeks to replicate with corporations the success it achieved with Latin American users.

Currently, Motorola occupies a comfortable second spot in the regional smartphone market, behind Samsung.

“In Latin America, we are number two, both with consumers and companies. We want to consolidate our position especially in the second group,” Georgia Sbrana (pictured), regional B2B sales director at Motorola Mobility, told BNamericas.

According to data from Counterpoint Research, Motorola accounted for over 20% of the region's smartphone market last year, compared to Samsung’s 41%.

Worldwide, however, Motorola is only the eighth player, according to consultancy Canalys, with less than 4% of the smartphone market, while Apple, Samsung and Xiaomi lead.

Sbrana said that Lenovo is number four and is contesting the third position in the global smartphone market. 

Lenovo is the world's top PC vendor, ahead of HP and Dell. In Latin America, Lenovo climbed to the first place in desktop and laptop sales in 2Q22, according to Canalys.

“After 11 consecutive quarters of profitability, Lenovo/Motorola decided to invest globally in what is B2B with the Motorola for Business unit. Latin America is a priority, and in Latin America the company has defined Brazil, Mexico, Argentina, Colombia and Chile as targets. Later, we also included Peru,” said Sbrana.

The central idea of Motorola for Business is to combine Lenovo's commercial PC strategy and Motorola’s smartphones approach to leverage sales, related to devices and solutions or services linked to them.

These include mobile device management and security solutions, identity access and industry-tailored support.

“Companies are not looking for hardware anymore. They would like to have a one-size-fits-all solution. Having 200 suppliers is a headache, with many contracts to manage. Thus, several customers came to us proposing strategies,” James Mattos, B2B sales director for Motorola Mobility Brasil, told BNamericas.

Motorola also launched two B2B smartphones. 

The first is ThinkPhone, a premium corporate device to complement Lenovo's ThinkPad PC line. In Latin America, the device is imported.

The other is E22, which is being assembled at the company's factories in Jaguariúna and Manaus, in Brazil. E22 is aimed at both end-users and corporates. 

The company is studying local production of ThinkPhone, said Mattos.

For now, neither of these two devices is 5G enabled. According to Sbrana, the technology is not yet a priority for companies when it comes to smartphones. 

One of the channels Motorola is investing in is B2B telecom. 

The company established a close relationship with carriers to reach end-users and intends to work closer with the B2B units of them, eyeing operators' corporate customers.

Even before the launch of Motorola for Business, the company added 50 regional smartphone customers who were Lenovo PC corporate clients in the past year, according to Sbrana.

Motorola reports small, mid-sized businesses and large corporations as clients, including financial institutions.

FORECASTS

In general, the device market is in crisis and the outlook is gloomy. The combination of Lenovo's mobile and PC forces for B2B would bolster the company’s position in this context.

Latin American smartphone shipments declined 14.2% year-over-year in 4Q22, for the region’s worst fourth quarter since 2013, according to Counterpoint Research.

Canalys, for its part, reported a 10% decline in Latin American shipments last year. 

“The road to recovery for the smartphone market is clouded with uncertainties. Vendors and channels will watch the market dynamic closely and take a cautious approach. Smaller vendors must focus on securing profitability by finding niche opportunities with streamlined portfolios and efficient channel management,” Canalys analyst Amber Liu said in a release.

“On the other hand, the popular brands will investigate ways of driving demand through their established IoT ecosystems, differentiated high-end offerings and effective channel and promotional strategies,” added Liu.

For 2023, IDC has revised its worldwide smartphone forecast due to slower-than-expected market recovery.

According to the latest Worldwide Quarterly Mobile Phone Tracker forecast, shipments will decline 1.1% to 1.19bn units, compared to 2.8% growth in the prior forecast, as the market continues to face weak demand and macroeconomic challenges.

Global PC shipments totaled 65.3mn units in Q4, down 28.5% year-over-year, according to Gartner. This marks the largest quarterly shipment decline since Gartner began tracking the market in the mid-1990s, the consultancy said.

“PC demand among enterprises began declining in the third quarter of 2022, but the market has now shifted from softness to deterioration. Enterprise buyers are extending PC lifecycles and delaying purchases, meaning the business market will likely not return to growth until 2024.”

Despite the drop, the top three PC vendors remained unchanged in the fourth quarter of 2022, with Lenovo retaining the No. 1 spot in shipments, with a 24% share, followed by HP (20.2%) and Dell (16.7%).

According to Gartner, Lenovo’s shipments fell in all regions except in Japan, declining over 30% in Europe/Middle East/Africa and Latin America.