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Lenovo To Take On Xiaomi With Newly Announced Subsidiary

October 16, 2014 - Written By Joseph Maxwell

Lenovo Group, one of the largest smartphone and computer manufacturers in the world, has announced that it will be creating a brand new company in China to focus on the growing demand for smartphones and tablets in the Asian market. This news comes close to the $39 billion company’s acquisition of Motorola Mobility from Google.

In a press release, Lenovo stated that the new company, which is yet to be named, will function as an online company, offering devices, services, and support directly to consumers. The company will coexist with Lenovo’s already successful smartphone division, which operates via more traditional relationships with carriers and businesses.

Lenovo, which is already one of the largest smartphone manufacturers in China, is seeking to strengthen their position in the region using a business model that competitor Xiaomi Inc. has found successful. Xiaomi, currently the largest manufacturer of smartphones in China, and Lenovo’s biggest competition, has been posting some great numbers this year, largely due to their success in online sales. Xiaomi, founded in 2010 as an inexpensive smartphone manufacturer, has only been in the smartphone business for a relatively short amount of time. Lenovo’s smartphone division has only been around for 2 years, but the Lenovo brand has been around since 2004.

While Lenovo hasn’t released the name of their new venture just yet, they have announced the future CEO of the company, as well as an official date. Chen Xudong, Lenovo’s current president of China, Asia Pacific and Emerging Markets will become CEO of the new subsidiary on April 1st of next year. With his experience in bringing Lenovo to its current status in the region, it will be interesting to see what this new company will have in store. With Chen Xudong taking over the new company, Lenovo will split responsibilities for their markets.Tong Fuyao, the current vice president of China’s relationship business, will take over as the new CEO of Lenovo’s China operations, while Ken Wong will become CEO of the Asia Pacific and Emerging Markets. Lenovo plans to announce more details about this new venture in the coming months, so stay tuned for more news.