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Lenovo planning US smartphone push as PC sales stall

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Lenovo is set to take aim at the US smartphone market within a year.

Yang Yuanqing, CEO of the Chinese hardware giant, told the Wall Street Journal that smartphones represent a “new opportunity” for the firm to grow, especially as demand for PCs continues to wane.

In the world’s biggest market of China, PC shipments are expected to grow by just 3-4 per cent this year as punters continue to favour mobile devices, according to forecasts from IHS iSuppli. In Western Europe it’s much worse - Q1 2013 shipments declined for the 11th quarter in a row, this time suffering the steepest year-on-year fall on record of 20.5 per cent.

Data points of that ilk mean it’s not surprising Lenovo is looking to smartphones, but it won’t be all plain sailing for the firm in the US, where its brand is not particularly strong compared with other markets, according to Canalys research director, Nicole Peng.

Of the 78 million desktops, tablets, smartphones and notebooks it shipped globally in 2012, just seven per cent hit the shelves in the US and despite global success its PC business remains in fifth place in the land of the free with less than five per cent market share.

“The competition landscape in the US smart phone market is far more challenging for new comers, with Apple and Samsung dominating over 70 per cent share,” Peng told The Reg.

“However to start selling smart phones in the US, more importantly to gain carrier support is strategically important for Lenovo’s overall PC+ strategy globally," she said.

Despite its US plans, it is the huge domestic smartphone market, which Gartner predicted Lenovo will take the lead in this year, that is set to drive the majority of volume, Peng added.

“Outside China, especially in developed markets, one of the biggest gaps that Lenovo need to fill is its patent portfolio, which its Chinese peers Huawei and ZTE are doing a relatively good job in building their patent pool."

“On the hardware side, Lenovo will have to demonstrate its capabilities to bring out innovative features, to integrate latest technologies and ID design. Meanwhile the leading players like Apple and Samsung are heavily investing in using software and services to build an integrated user experience and this is the areas that Lenovo and most of other Chinese companies still have a long way to go.”

Gartner is slightly more optimistic, however, claiming back in October last year that by the end of 2014, three of the top five mobile handset vendors will be headquartered in China – with Huawei and ZTE likely to be the other firms in question.

Lenovo couldn't immediately be reached for further comment on its plans. ®

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