Lenovo to expand in mobile market

By Wang Xing (China Daily)
Updated: 2010-04-20 09:18
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BEIJING - Chinese computer maker Lenovo Group said on Monday it aims to become the biggest producer of mobile devices in China as the company tries to expand its presence outside its traditional PC turf.

Yang Yuanqing, chief executive of China's biggest PC maker, said Lenovo plans to gain a market share in China's mobile market that "equivalent" to its dominant position in PC market in the country.

"The mobile Internet device market would overtake traditional PCs in the next five years," said Yang, at the launch of the company's latest smartphone "LePhone". He expects mobile Internet products to account for 10 to 20 percent of Lenovo revenue in five years.

As the world's fourth-largest PC maker, Lenovo's core business was severely impacted during the global financial crisis, as corporate customers reduced IT spending to cut costs.

But the company's business has been on the rise since November last year, as robust demand from emerging markets and a series of cost-saving measures helped negate declining sales in mature markets.

Lenovo Chief Operating Officer Rory Read said it aims to sell "millions" of the phones over the next five years, and "tens of millions" after that.

Lenovo paid $200 million late last year to buy back its mobile phone assets that it had sold earlier to focus on PCs.

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Yang said on Monday he believes that the company's new LePhone device, based on Google's Android system, will have a better position in China than Apple's popular iPhone and Research In Motion's Blackberry handset, as the new smartphone contains many domestic services provided by top local partners including Baidu Inc, Alibaba Group and Tencent Inc.

He said the product, which will be sold cheaper than the iPhone, would also be available in overseas markets in the future.

Revenue of Lenovo rose 33 percent to $4.78 billion in the last quarter of 2009.

Liu Chuanzhi, chairman of Lenovo Group, said he believes Lenovo's robust growth will continue over the next three years, as the world economy recovers.

Lenovo first showcased the LePhone in Las Vegas in January. It also unveiled a new "smartbook" dubbed Skylight as well as a new notebook IdeaPad U1, which has a detachable screen.The company launched an online-application store earlier this week.

"Obviously Lenovo regards mobile devices as its next revenue generator, which is a future trend," said Simon Ye, an analyst from research firm Gartner Inc.

But it's still hard to predict how the new products will perform in the market, he said.