May 28, 2013
Lenovo Shifts Into High-end Smartphones
redOrbit Staff & Wire Reports - Your Universe Online
Lenovo Group, the second largest PC maker by shipments, has accelerated its shift into the high-end mobile phone sector as part of its move to challenge Apple and Samsung in China´s consumer electronics market, China Daily reported on Monday.
"Lenovo will become the No 1 smartphone vendor within China in two years," said Liu Jun, senior vice-president of Lenovo who runs the company's PC, smartphone and tablet businesses.
Sales turnover of Lenovo's smartphone business is projected to comprise more than 15 percent of the company's total by the end of this year, he added.
Lenovo released its latest smartphone — the K900 — just two weeks ago, and hopes the $538 device will attract customers away from Samsung's Galaxy Note series and Apple's iPhone 5.
The Beijing-based manufacturer said it hopes to sell one million of the new devices in China alone.
Liu said high-end smartphone customers in China need more options, and Lenovo is well positioned to meet that demand.
High-end smartphones comprised 10 to 15 percent of the market share in China, said Chen Wenhui, Lenovo's vice-president and head of its mobile business.
However, the company still lagged behind Samsung, Nokia and Apple during the first quarter of the year because its smartphones had not received much attention until shortly before their launch.
Samsung took nearly a quarter of China´s smartphone market share, with Nokia coming in second at 15 percent, followed by Apple at 13 percent, according to figures from iiMedia Research. But Lenovo was the top domestic smartphone maker in China in terms of market share.
Lenovo's shift into the mobile market comes in the middle of a long, painful slump in the PC industry. Research firm IDC warned earlier this year that global PC shipments are set to suffer a double-digit decline during the second quarter of this year.
The trend has PC makers scrambling to find new ways to generate profits. Hewlett-Packard Co, the world's No.1 PC manufacturer, is striving to turn itself into a software and services company, while No. 3 PC maker Dell hopes its one-year-old software group could generate at least $2 billion over the next few years.
Lenovo, however, has decided to keep with hardware manufacturing, shifting into the consumer electronics and corporate server sector in search of higher profit margins. Last year, the company set up a joint venture with data-storage company EMC to sell servers in the Chinese market, and also made an unsuccessful attempt to acquire IBM's server unit in April.
Just days before Lenovo released its latest smartphone, its executives set another aggressive goal, saying they wanted to sell 100 million terminals, including smartphones and tablets, before the end of this year.
"It's a reasonable target for us because we are ready to join Samsung and Apple as the world's top consumer electronics vendor," Liu said.