China 4G services expansion intensifies Xiaomi-Lenovo rivalry
Lenovo may erode strong lead of smartphone start-up with Motorola acquisition amid the mainland's switch to the new 4G mobile trend
Xiaomi, the listing hopeful that aspires to become the world's largest smartphone company, could see Lenovo Group chip away at its strong lead on the mainland from next year as the computer giant drives 4G handset sales with its recently acquired Motorola brand.
It is a showdown that would also mark the strategic transition by the mainland's mobile-phone suppliers into shipping more 4G devices than 3G products in the world's biggest smartphone market.
The shift comes at a crucial time for a firm that some view as the mainland's main challenger to technology giants Apple and Samsung Electronics, with investment banking sources expecting Xiaomi to launch a US$1.5 billion Hong Kong share offering early next year.
Anything that casts doubt on a business model and product line-up that bankers calculate have put a US$50 billion price tag on Xiaomi could easily spook potential investors.
Once-robust shipments of 3G and basic 2G handsets on the mainland are forecast to rapidly shrink over the next two years, following the aggressive rollout of new 4G mobile infrastructure by the country's telecommunications network operators.
That could be a problem for Beijing-based Xiaomi, the marketing-savvy consumer electronics start-up founded in 2010 that has mostly sold 3G devices.