The CEO of Lenovo believes his company is the only one that can challenge the dominance of Apple and Samsung in the smartphone space, and plans to do so by shipping 80 million units in 2014.
Yang Yuanqing said a pending deal to acquire Motorola Mobile will give Lenovo the scale to compete with smartphone market leaders Samsung and Apple in global markets beyond Lenovo's domestic Chinese market. Indeed, the expansion is critical to Lenovo's success in smartphones, due to a highly competitive domestic market, Yang told Gulf News.
The chief executive believes Lenovo can achieve higher margins on its smartphones in overseas markets than it can in China, and said Motorola will enable it to compete in the nascent market for low-cost smartphones.
Lenovo agreed to acquire Motorola Mobile from Google in January for $2.9 billion (€2.1 billion), just 18 months after the search giant acquired the device maker for $12.5 billion in a bid to end patent battles surrounding its Android-powered smartphones by accessing Motorola's extensive intellectual property.
The Chinese vendor is set to become the world's third-largest producer of smartphones when the Motorola acquisition is cleared. Research firm IDC ranked the company in fourth place in the first quarter of 2014, on shipments of 12.9 million smartphones, but those figures do not yet include shipments of Motorola branded devices. The research company noted Motorola will give Lenovo "a footprint in markets--including North America and Western Europe--where it has been notably absent."
Overall, Lenovo shipped 50 million smartphones in 2013, and predicts it will increase shipments to 80 million in 2014, Gulf News reported.
Lenovo is also awaiting approval for a planned $2.3 billion acquisition of IBM's low-end server business, Gulf News reported. Yang is seeking the move because the server business offers greater profit margins than Lenovo's core PC market, the news site stated.
The company recently revealed its net profit rose 29 per cent year on year to $817 million in the first quarter of 2014, the BBC reported, as PC sales bucked a global downward trend.
For more:
- see this Gulf News article on smartphones
- see this separate Gulf News report on IBM
- see this BBC report
- see this IDC press release
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