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Lenovo: It could be YEARS before a US smartphone launch

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Chinese hardware giant Lenovo appears to be delaying its plans for a US smartphone launch, after executives at CES last week dampened previous claims from the firm that it would happen in 2014.

CEO Yang Yuanqing told the Wall Street Journal back in May 2013 that he expected the company to launch a smartphone business Stateside “within the year”.

However, similar predictions were noticeably absent from exec media interviews at the Las Vegas show.

Gerry Smith, president of Lenovo in the Americas, told Chinese tech portal Sina that the plan was now to establish the brand in Latin America and Brazil first, before entering the US space in 2-3 years’ time.

Other caveats included “waiting for the right time” and the “right product”, and ramping up investment in branding first.

SVP Liu Jun was similarly cautious, apparently claiming that Lenovo needs to do more in emerging markets before it turns attention to the US.

The firm is now in fourth place globally behind Huawei, Apple and Samsung with a 4.7 per cent share of the smartphone market but is still heavily reliant on its domestic market, according to the latest figures (Q3 2013) from analyst IDC.

It currently sits in second place in China with a share of 11.8 per cent, behind Samsung (19.3 per cent) and just ahead of local rival Coolpad (11.7 per cent), IDC told The Reg last week.

Back in his May 2013 interview, Yang Yuanqing described the mobile market as a “new opportunity” for Lenovo to grow, and with PC sales continuing to slump, it is more important than ever to the firm.

However, IDC senior research manager Melissa Chau told El Reg that carrier partnerships and brand recognition would be major obstacles facing Lenovo in any US push – with the firm facing an extra headache in being forced to differentiate from local rivals Huawei and ZTE.

"If you think about other brands, Huawei has been in the US since forever but it still has very low brand recognition. It’s only really able to sell low-end phones and can’t move up the value chain,” she said. “Lenovo might have to find another angle.”

The commoditisation of the smartphone market means offering low-cost handsets with large screens may not be enough for Lenovo to win the hearts and minds of American consumers.

“It makes it difficult for any firm but there is also a halo of uncertainty around Chinese brands – whether it’s issues around security or build quality,” argued Chau.

“They’re not insurmountable but it’s just likely to take a lot of time.”

Branding and partnership issues aside, there may be more pragmatic, legal reasons for Lenovo's apparent delay, according to Canalys analyst Jessica Kwee.

"Lenovo needs to better prepare itself in terms of IP, which has been a big issue in the US for some vendors," she told The Reg. "For example, HTC & Samsung have come under fire because of patent litigation, which may not be the case in other countries where the patent system is not as well established."

Lenovo’s procrastination contrasts Zuhai-based rival Meizu, which looks set to launch smartphones into the US this year after showcasing several models at CES.

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

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