According to the Wall Street Journal reported, due to the slowdown in the domestic economy, the global demand for mainstream PC in the doldrums, the first PC maker Lenovo Group plans to sell its smartphones to overseas markets.
With this step, Lenovo will join with Samsung and Apple to compete in emerging markets. But for Lenovo to enter the market outside of China is a challenging task. Analysts said that although in the past few years, the association has a certain share of the Chinese smartphone market, but its mobile phone business and profit.
According to market research firm IDC, the second quarter, Lenovo’s share of the smartphone market in China is 11%, second only to Samsung’s market share of 19%. Apple ranked third with 10% market share. Lenovo did not disclose the specific business unit profitability.
Lenovo Asia-Pacific and Latin American regions president of Mirko Fanduyiji, said in a recent interview, “We are still in the business to strengthen and investment process. Margins of the smart phone business is quite good, but need to achieve profitability time.”
Fanduyiji, Lenovo smartphone sales in India will begin in early November. PC sales in India, Lenovo has the leading position in the market. In order to promote the company’s smartphone sales in emerging markets, the company last week began sales of smartphones in Indonesian market, has recently entered the smartphone market in the Philippines and Vietnam.
“We decided to offer a variety of products for the user to select not only covers the high-end and low-end (smart phones), also a midrange smartphone.” Fanduyiji added.
Lenovo is the reason to strengthen the sales of the mobile market outside China, mainly because of the recession led to the global PC demand is falling. Third quarter global PC shipments fell 8.3% compared with the same period last year, according to market research firm Gartner data show. Lenovo to 16% of the global market share for the first time beyond the Hewlett-Packard to become the world’s first PC manufacturers, analysts say, to maintain its leading position, the company needs to make business diversification.
Since its 2005 acquisition of IBM’s PC business, Lenovo has been mainly to sales of personal computers in China. China’s strong economic growth, Lenovo in the financial crisis of 2008 and over the past few years, the growth of more than rival Hewlett-Packard, Dell and Acer of Taiwan. But now, the company is also facing difficulties: China’s economic growth is slowing, companies do not want to upgrade result in global PC sales fell, and consumers are transferred from laptops to smart phones and tablet PCs. Based on the strategic adjustments, the company announced earlier this year invested 800 million U.S. dollars to a new base for the development of mobile product development.
Lenovo models priced between $199 – $349, plans to start selling in India. Fanduyiji said that all the models are based on Google’s Android operating system, and support local languages and applications.
And in Indonesia, association with Indonesia’s largest mobilephone retailers and distributors Trikomsel cooperation began selling five new smartphones for 3G smartphone users.
Fanduyiji also said that Lenovo is in no hurry to enter the developed markets of the smartphone market.
“Over time, we will enter the mature markets such as Europe and the United States, but we also do not have this plan. Takes us more time to prepare for this expansion,” he said.
Analysts said that the emerging markets, Lenovo will face fierce competition from Nokia and Samsung. Have occupied a large part of the market and the scale of the two companies in the emerging markets.
“Mobile phone business profitable is the biggest problem the Lenovo smartphone market share in China’s growing, but it does not make money. Earnings will be more difficult, because the association does not have a brand advantage of the home country and the distribution network in emerging markets. “Sanford Bernstein senior research analyst Alberto Moel said.
Fanduyiji acknowledged the impact of the economic slowdown in the global PC manufacturers, Lenovo was not spared. Lenovo PC sales are slowing.
Sales of large enterprise customers has definitely dropped, and the consumer side, the company is also facing more intense competition.”