Lenovo puts new focus on smartphones as PC sales drop

Chinese manufacturer Lenovo gets 80% of its revenue from PC sales. But the company's Chief Executive,Yang Yuanqing, says that Lenovo needs to make the transition to a new business. "Smartphones are our new opportunity," he says. It isn't like Lenovo is starting from scratch. In China, the OEM is the second largest smartphone vendor with 11% of the market, topped only by Samsung. Lenovo took the second spot in it's home country after nearly tripling its market share from 4.1% in 2011.

Late last month, CEO Yuanqing said that he wants Lenovo to start selling smartphones in the U.S. This is going to require the company to understand some of the differences in the stateside smartphone market where most smartphones are sold by carriers. In Asia, smartphones are usually purchased from retailers. Another problem facing Lenovo is that its name is not associated with handsets. To compete in the U.S., Lenovo is going to have to go up against companies like Samsung and Apple, whose names instantly call to mind their latest flagship handsets.

Thanks to the ability of smartphones and tablets to handle many computer related functions, IDC is calling for PC and Laptop shipments to decline 7.8% this year and an additional 1.2% next year. With numbers like that, Lenovo is pushing its transition to smartphones. It hopes to sell 50 million smartphones this fiscal year, which ends in March. That would be an increase of 20 million units or a 67% gain from last year.

 As he did last month, Yang compares the smartphone business to the fashion industry and says the game is all about marketing. For example, when it launched its 5.5 inch Lenovo K900 last month, it used NBA star Kobe Bryant as a spokesman to push the Intel powered device, just as it did when it released the Lenovo P870.

source: WSJ