Lenovo Prepares to Enter the US Smartphone Market

May 27, 2013 - Written By Lucian Armasu

Lenovo is not doing too badly in the PC market right now, they’re one of the very few PC companies left that can still post growth each quarter. The PC business is 80% of their revenue, but they know that can’t last forever as people stop buying new computers, and buy new phones and tablets instead. This is why they seem to want to take the smartphone market a lot more seriously going forward.

Their sales in China have doubled over the past year, but they realize that if they want to build a global brand, they will need to conquer the western markets, too, in both market share and mindshare. To do that, it seems Lenovo understands that it will need to focus a lot on advertising:

The market for smartphones “is more like the fashion industry,” said Mr. Yang. “We know the importance of marketing, and we will strengthen that.”

Advertising and brand marketing is what got Samsung in the position they are in today, with 30% of the smartphone market, and 95% of the Android market profits. Lenovo will probably try to follow in their footsteps. However, Lenovo is unsure right now if they need to buy a company to do that or if they will do it on their own.

The Lenovo brand is not bad in PC’s, even in western markets, but I don’t think it means much in smartphones, where people are barely aware they are even making phones. Lenovo will need to create strong smartphone brands in the western markets, and especially in US, where the carriers might be a big impediment for that, and try to push their own brands instead.

One way for Lenovo to create high quality devices and brands, would be to buy HTC, especially if HTC doesn’t recover and intends to sell. I think it would be worth it for Lenovo. If it will be worth it for HTC, that’s a different story, but if they are in that position, then they won’t have much of a choice anyway. And maybe they need someone with a lot of money behind them, to create much stronger brands that can compete with the Samsung brands toe-to-toe. On the other hand, it’s better for us if HTC manages on its own, and Lenovo also comes in to compete – the more competition, the better.

[Via WSJ]