Lenovo, the world's second-largest supplier of personal computers, may be gearing up to enter the television-manufacturing business with Japan's Sharp as partner, according to reports yesterday.
Citing unnamed sources, both the Nikkei daily and Jiji Press reported that Sharp was negotiating to sell its liquid-crystal display (LCD) television assembly plant in Nanjing to Lenovo and then establish a joint venture with the computer maker to sell televisions on the mainland.
The news may have rattled some investors as Lenovo's shares dipped as low as HK$7.57 after the midday break from a high of HK$7.80 in early trading yesterday. The stock closed at HK$7.65, down 1.16 per cent.
In Tokyo, the reports helped boost Sharp, which gained 7.3 per cent to finish at 338 yen (HK$29.65), its highest close since July 11.
Lenovo spokeswoman Angela Lee said the company "does not comment on market rumours and speculation".
In a statement to the Tokyo Stock Exchange, Sharp said it had not made an announcement about the reported talks.
Lenovo last year started selling on the mainland its line of internet-connected "smart TVs". Its senior management had said the firm had the capability "to dominate the [domestic] smart-TV market" because its products were designed for mainland consumers. Initial sales figures are not provided.
Bernstein Research senior analyst Alberto Moel said the deal, if true, would see Lenovo "stretching itself too far in the business". He added: "I don't see the need for Lenovo to become a TV manufacturer because they can just continue outsourcing [smart-TV production]."