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Imitation Doesn’t Lead to Differentiation

September 8, 2015

Insightful article by Eva Dou, for the WSJ, titled Rivals Try to Reinvent Xiaomi Business Model. I think the use of the word “reinvent” is almost meant to be ironic; you won’t find any hint of reinvention from the executives that Dou interviewed. Some nuggets:

In a hint of how quickly Lenovo has worked to develop a Xiaomi rival, Mr. Chang said his team was still figuring out what the [Lenovo brand] name ZUK stands for.

and

One morning this summer, hundreds of young engineers at Wingtech in blue cubicles and humming research stations were busy designing and testing smartphones for clients. Large clients such as Xiaomi and Huawei were cloistered into private rooms, to avoid secrets leaking to rivals. But testing equipment was shared, cutting costs for all the brands.

After reading these passages, what do you think the odds are that any one company’s business model or product will be different than the others’? Low. One alternative path forward: caring about consumers and the technology it takes to build better product experiences. Don’t recall if the executives interviewed used any variation of either word? They didn’t. And that leads us to the prediction:

IHS iSuppli China Research head Kevin Wang said […] “A lot of these smartphone players are probably going to die.”

Basically, some Chinese OEMs hope imitation can lead to differentiation. It won’t.

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Filed Under: Android, China, Huawei, Innovation, Leadership, Lenovo, Xiaomi

Motorola Mobility to Take Over Lenovo’s Mobile Business

August 28, 2015

Amina Elahi, for The Chicago Tribune:

Chicago-based Motorola Mobility will absorb the mobile unit of Lenovo, the Beijing-based technology giant, with Rick Osterloh,⇒ president and COO of Motorola Mobility, leading the global smartphone business.

I’m biased, but I think this is the right move.

Lenovo has many commendable attributes: decent market share in China, well-spec’d products, timely response to select component trends, and reasonable industrial design. Lenovo has proficiency.

But Motorola has a more clear, more cohesive portfolio. It has a better product in the high mid-tier (Moto X / Style). The Motorola brand is better known, more widely, when it comes to smartphones. And it has more experience in markets beyond China. Motorola has traces of its past success, and renewed product focus.

And Motorola also has Rick Osterloh. I’ve worked with Rick; he has an excellent mix of product, technology, and operations knowledge. He’s superb at articulating the strengths and challenges in a situation, and what action to take to move forward. Plus, he’s a super nice guy. Rare.

So, net-net, folding Lenovo’s smartphone operation under Motorola – and Rick – makes sense.

Now, does this help the combined entity overcome some of its disadvantages? – low installed base, little in-house technology development, small scale, limited distribution, and limited marketing spend. – No. Motorola/Lenovo, like most Android OEMs, will still need to dig itself out of this situation.

But this operational adjustment makes it easier to maneuver and to focus the global product line, R&D, and sales and marketing.

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Filed Under: Lenovo, Motorola, Smartphones

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