Lenovo plots own strategy to win mobile device battle

PUBLISHED : Saturday, 19 February, 2011, 12:00am
UPDATED : Saturday, 19 February, 2011, 12:00am

Yang Yuanqing, the chief executive of Lenovo Group, quickly frowned on the word 'emulate' when asked about how the mainland computer giant's mobile internet devices strategy compares with that of iPhone maker Apple's.

'Emulate is not a good word,' said Yang, as he quickly pointed to devices on a small table. These were the LePhone, the first Lenovo smartphone that was released last year on the mainland, and the LePad media tablet, which will have its domestic launch this first quarter.

In an interview, Yang said Lenovo has plotted its own approach to become a global leader in the highly competitive mobile internet devices market.

That included creating a new media tablet for business based on ThinkPad, its flagship notebook computer, expanding its international distribution network and eyeing potential new acquisitions that could fit its mobile devices strategy.

'This is a battle we cannot lose. We must win no matter how much money we need to invest,' Yang told the South China Morning Post the day after Lenovo reported robust gains in its fiscal third-quarter results.

With traditional computer makers such as Apple, Lenovo, Dell, Hewlett-Packard in the mobile internet device market, Yang said these products will 'account for 15 per cent to 20 per cent of the total global PC market very quickly'.

Lenovo, the world's fourth-largest supplier of personal computers, last month created its new Mobile Internet and Digital Home Business Group in Beijing, to initially grow the operation on the mainland before expanding worldwide.

Charles Guo, an analyst at JP Morgan Securities (Asia-Pacific), said the mainland is Lenovo's 'testing ground' for its new mobile products.

Yang said Lenovo's first generation of mobile internet devices are based on a highly customised version of the Google-developed Android operating system, unique designs and applications for the local market.

Yang said Lenovo's advantages on the mainland include a strong brand, a broad channel network that reaches even the smallest towns, strong ties with the nation's three big telecommunications carriers, and a growing relationship with application providers, big or small. The LePad and a media tablet version of ThinkPad are slated to be introduced to international markets 'either at the end of the second quarter or start of the third quarter', he said.

Rivals for LePad would include Apple's iPad and the Galaxy Tab from Samsung Electronics, while the ThinkPad media tablet would go up against BlackBerry maker Research In Motion's new PlayBook in the potentially lucrative enterprise market.

Rhoda Alexander, an analyst at market research firm IHS iSuppli, said a deluge of media-tablet rivals combined with the advent of personal computer-type platforms will cause Apple to lose its market lead in tablets by 2013.

Yang sees a mighty challenge for Lenovo's mobile devices outside China, where the company lacks a wide distribution network, mobile applications and high brand recognition.

Bringing in the LePhone to international markets would need closer co-operation with mobile network operators and application developers, which Yang considered a big priority this year for Lenovo.

Hong Kong-listed Lenovo posted a 25 per cent year-on-year increase to US$99.7 million in its fiscal third quarter to December.