 "Lenovo Vibe P1m")
Lenovo (India) has turned profitable in 2014-15, its first annual profits since 2010-11.
According to data available with the Registrar of Companies (RoC), the company posted a Rs 26.7 crore net profit for the financial year ending March 31, 2015, against a Rs 44.6 crore net loss during the previous year. Lenovo's revenue grew 41 per cent to Rs 5,667 crore from Rs 4,028 crore in 2013-14.
The company has been posting sales growth year after year since 2010-11 but its bottom line has remained in the red (see table).
Since 2014, Lenovo has gained significant market share in both personal computers and smartphones. It increased its market share in personal computers from 13.5 per cent in April-June 2014 to 19.8 per cent in January-March 2015. According to research firm International Data Corporation (IDC), Lenovo held on to its third spot in the market.
"Being a full range player helped Lenovo to win consumer trust, apart from hitting the right price point," said Faisal Kawoosa from research firm CyberMedia Research.
The success of other products like laptops, personal computers and tablets also helped Lenovo's smartphone sales. Success of Lenovo's K3 Note, A6000 Plus, and Moto G 3rd Gen helped the company gain fourth spot in the smartphone market in September.
"The group also started local manufacturing of its smartphones in India to strengthen their position in the market," IDC said in November 2015.
In the past six quarters, Lenovo, including Motorola, has not only gained market share - from less than 5 per cent in June 2014 to some 11 per cent in December 2015 - but it also toppled home-grown Intex in the last quarter to be the third-largest smartphone vendor in India, reports from CyberMedia Research and Canalys suggested.
Experts said Lenovo achieved its success because of its strategy and by judging the market right. Lenovo launched its first 4G LTE smartphone in mid-2014 while Samsung, Micromax and Lava, the other players of the top five, entered the segment in 2015.
Lenovo's focus on 5-inch and above screen size devices also paid off.
Motorola (now Moto), which Lenovo acquired in 2014 from Google, helped the company establish its presence in smartphones above the Rs 20,000 price band.
Lenovo is rebranding devices under its brands Vibe and Moto to reduce cannibalisation. It has also decided to sell Moto smartphones through offline channels this year.
Yuangqing Yang, chief executive, Lenovo, has set a target of becoming one of the top 20 companies in India with annual revenue of Rs 40,000 crore by 2018.
