Lenovo is looking to challenge Apple & Samsung
Competition in the global tablet and smartphone market is going to get a lot more intense following the news that Lenovo, the Chinese consumer electronics manufacturer is looking to become a major global smartphone and tablet manufacturer. Lenovo is primarily known for its PC’s and in 2011 it had 13% of the global market, making it the second largest producer behind HP but ahead of Dell. To date its smartphone and tablet business has been limited to Asia, where it is third largest smartphone manufacturer in China, growing from 3.2 million units in 2010 to 15 million in 2011, as well as second largest tablet manufacturer with 20% of the Chinese market, just behind Apple; but with global sales of PC declining it is looking to remedy this position.
To realize its ambitions in becoming a global smartphone and tablet manufacturer, Lenovo has announced they are investing 5 billion Yuan (US$790 million) over five years in a new facility in Wuhan, China that will focus on the research, development and production of smartphones, tablets and other web-enabled devices like smart TV’s. According to a press release from Lenovo, the new facility will be focused primarily on supplying the capacity it needs to compete in the global market and predict operations will begin by October 2013, employing a workforce of up to 10,000. In a statement by Lenovo’s CEO and chairman, Yang Yuanqing, he articulated Lenovo’s ambitions by saying “We been very busy this spring sowing seeds for the future. Lenovo not only wants to be a leading PC vendor, it also wants to be a global leader in providing Internet consumer devices.”
While Lenovo have some way to go to catch up with the consumer electronics heavyweights like Samsung and Apple, early indications show they could be a serious contender. Like Apple, Lenovo already have their own retail stores known as Lenovo Exclusive Stores (LES) where aside from providing demonstrations and advice on the latest product lines, they also offer PC diagnosis, parts replacement, and repair services. These stores exist all over Asia, with over 1,000 in India alone and in February they opened their first non Asian store in Croatia and announced more are to follow.
Until their new facility is operational Lenovo are content to focus their non PC business on the Asian market. With the Chinese market expected to be worth about US$201.0bn by the end of the year and to increase to US$289.7bn by 2016, according to Business Monitor International, they are well placed to increase their market presence and have just launched their first smart TV, the ideaTV K91 that incorporates a games consul and works off the Android 4.0 operation system, which even Google’s own TV’s have yet to adapt. With innovative products like this I predict Lenovo will go on to become a formidable competitor in the global market.