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Lenovo in mobility drive

By Gao Yuan (China Daily)    09:25, August 16, 2013
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Workers assemble computers at a Lenovo Group Ltd plant in Chengdu, Sichuan province. Provided to China Daily

Lenovo Group Ltd will pursue new customers in more emerging markets and push its mobility drive, executives said.

The comments came on Thursday as the world's biggest personal computer maker reported impressive $8.8 billion quarterly revenue.

"Future growth in the global smartphone business lies in emerging markets, and our focus is shifting from high-end customers to mainstream buyers," said Yang Yuanqing, chairman and chief executive officer.

The electronics manufacturer said its shipments of mobile devices overtook those of PCs for the first time in the first quarter of the new fiscal year, which started in April.

Powered by robust growth in the smartphone and tablet segments, the company posted net profit of $174 million in the quarter, beating the Wall Street estimate of $166 million.

Sales of mobile devices generated 14 percent of revenue, according to the company's results.

Earlier this year, Lenovo said its major competitors are consumer electronics vendors including Apple Inc and Samsung Electronics Co, rather than traditional PC makers, a group that includes Hewlett-Packard Co and Dell Inc.

"We are looking for a more reasonable price tag for our devices. The advantages in price and channel networks will help us to take on our rivals," said Yang.

Lenovo said its mobile devices are ready to make their bow on the global stage, and it will start in emerging markets, where competition is less intense.

Lenovo has gained a 10 percent market share in India and Russia. Now, it's exploring markets in the Middle East and Brazil.

Lenovo became the fourth-largest smartphone vendor in the past quarter, surpassing ZTE Corp, according to research company IDC. Its market share stood at 4.7 percent, lagging behind Samsung, Apple and LG Electronics Inc, said IDC.

Analysts said Lenovo should beef up its smartphone unit through mergers and acquisitions, such as a purchase of BlackBerry Ltd, which is currently for sale.

"Lenovo is known as a company with a history of using methods such as M&A in its overseas expansion.

"BlackBerry seems like a good fit in many ways, such as corporate culture, product portfolio and channel strengths," said Nicole Peng, research director of research company Canalys China.

The company aims to sell 50 million smartphones and 10 million tablets this year, targeting China and developing markets in Southeast Asia, East Europe and Latin America.

Analysts said the ambitious plan will help the Chinese company to cement its place in the market.

Lenovo is hoping the thriving mobile gadget market will boost its earnings, with the global PC industry having experienced its worst decline.

Worldwide PC shipments fell 10.9 percent from April to June, the fifth straight quarterly decline, data from industry consultancy Gartner show.

(Editor:WangLili、Gao Yinan)

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