Lenovo thinking of returning to mobile market
With nationwide 3G services fuelling more demand for advanced wireless handsets, mainland computer giant Lenovo Group is taking another look at the mobile-phone market.
'We are studying this market closely to see what business opportunities emerge in the mobile internet arena,' said chief financial officer Wong Wai-ming. He described Lenovo as 'very interested' in tapping into the 'convergence trend' of 3G access on both personal computers and handheld devices.
Lenovo, which doubled net profit year on year to US$53.1 million in its fiscal second quarter to September, exited the mobile-phone manufacturing business last year to marshal resources and sharpen its focus on expansion into the international consumer and enterprise computer markets.
The world's fourth-largest personal computer supplier had sold its money-losing handset manufacturing unit, Lenovo Mobile Communications Technology, for US$100 million in March last year to a consortium led by Hony Capital, the private equity arm of parent company Legend Holdings.
Wong said the divestment was the right decision at the time because of the significant capital investment needed to continue in the highly competitive handset business.
The handset manufacturing business was allowed to retain the Lenovo Mobile name under that deal. 'Lenovo will likely base its decision [to re-enter the mobile industry] on how successful China Mobile's 'OPhone' market will be,' said Charles Guo, a technology analyst at JP Morgan Asia-Pacific Equity Research.
This year, Lenovo Mobile joined Taiwan's HTC Corp, South Korea's LG Electronics and Dell - in what is the United States-based computer maker's first foray into the mobile industry - as part of a group of suppliers providing China Mobile with low-cost 3G smartphones based on its 'OPhone' operating system.
Lenovo Mobile's 01 model was the first OPhone handset shown publicly by China Mobile in August this year.
China Mobile, the world's largest mobile network operator with more than 500 million subscribers, saw the OPhone platform as a quick way to achieve mass-market adoption of 3G services on its network, which is based on the mainland-developed TD-SCDMA technology.
Rivals China Unicom and China Telecom Corp provide 3G services on networks based, respectively, on the more mature WCDMA and CDMA2000 1x EV-DO standards, both of which offer a greater variety of handset models from more makers.
