Lenovo hints at smartphone venture with mystery partner

Chinese computer and smartphone maker Lenovo said it is in "preliminary negotiations with a party in connection with a potential joint venture transaction" related to its smartphone business, according to a filing the company made with the Hong Kong stock exchange.

Lenovo did not indicate which company it is holding talks with. The company said it has not yet struck a deal with the unnamed potential partner.

However, Japanese media and Reuters reported that Lenovo is in detailed talks with Japanese vendor NEC. Reuters said that, according to an unnamed source, NEC has been in talks with Lenovo since early this year on a possible sale or joint venture involving its mobile unit.

An NEC spokesman declined to comment on the possibility of a tie-up. "Our mobile phone business is in a difficult state and we acknowledge that we need to decide on a direction for the business," the spokesman told Reuters. "For that, we are considering various opportunities."

Lenovo CEO Yang Yuanqing told French newspaper Les Echos in late March that a deal with BlackBerry (NASDAQ:BBRY) "could possibly make sense, but first I need to analyze the market and understand what exactly the importance of this company is." His comments come after Lenovo CFO Wong Wai Ming told Bloomberg in January that the company was "looking at all opportunities," including BlackBerry.

According to ABI Research, Lenovo was the No. 9 global handset maker by volume in the first quarter of 2013. However, Samsung Electronics maintained its momentum in the Chinese smartphone market by shipping 12.5 million smartphones there in the first quarter, capturing 18.5 percent of the market, according to data from research firm Strategy Analytics. Lenovo was No.3 in its home market, according to the report. Expanding its presence heavily beyond China through a joint venture could help bolster Lenovo's sales.

For more:
- see this Reuters article
- see this Dow Jones Newswires article (sub. req.)
- see this CNET article

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