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Lenovo may soon make smartphones in India

Manu P Toms, Hindustan Times  Bangalore, June 18, 2014
First Published: 22:44 IST(18/6/2014) | Last Updated: 01:13 IST(19/6/2014)

Digital device manufacturer Lenovo may soon manufacture smartphones and tablets in India, when it achieves 5% market share.

“Our goal is to hit 5% market share. It might be a right volume level to do the business case for starting local manufacturing,” said Amar Babu, managing director, Lenovo India, told HT. “We are doubling volumes every quarter. We are very bullish and confident about growth,” he said. “As things stand today, we are reasonably competitive. We can do a lot better with local manufacturing. Besides cost, time to market is important especially in technology industry,” he added.

Lenovo, which launched smartphones in India in late 2012, currently holds 1% share of India’s smartphone market.

In the last budget, the government had reduced excise duty on manufacturing of smartphones in India and Lenovo is keenly awaiting the new government’s policies. “We will have to see if it continues,” he said. “If we have a competitive component industry, all the multi-national companies will look to manufacture phones in India,” he added.

Babu said Lenovo’s global strategy is to manufacture locally. It has a computer manufacturing facility in Puducherry with a capacity of three million units per year, which came into its fold along with the acquisition of IBM’s personal computer business in 2005. “Our manufacturing facility in India is almost as competitive as that in China. We started with desktops and now we manufacture our entire range of desktops and laptops” he said.

Lenovo acquired phonemaker Motorola from Google in January for $2.91 billion. “With Motorola’s acquisition we are getting 3,000 engineers, adding to our product muzzle,” Babu said, adding that retaining the ‘Moto’ brands of smartphones will boost its sales further once the integration is completed.

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