Lenovo to see fresh gains from AR-ready smartphone as it rides Pokemon Go bandwagon

Chinese technology giant Lenovo Group could see a US$1.5 billion windfall from an increased global demand for more advanced smartphones designed to run augmented reality (AR) applications, such as the Pokemon Go mobile game.

Analysts at Bernstein on Monday forecast what they described as a “super bullish” scenario for Lenovo based on the Hong Kong-listed company’s ability to ship three million of its premium, AR-capable smartphones, which cost US$500 each, in the next 12 months to meet such a demand.

“It certainly helps the turnaround of Lenovo’s mobile [business] segment,” Bernstein senior analyst Alberto Moel said in a report.

Moel pointed out that Bernstein was aggressive in its assumptions on Lenovo, in which it has an outperform rating on its stock, “so the actual effect could be much less”.

Lenovo’s shares opened at an intraday high of HK$5.29 before settling down 2.84 per cent to close at HK$5.13 on Monday.

That halted the 13 per cent rally in Lenovo’s share price since July 11, which Moel said was likely fuelled by reports the company’s new AR-ready Phab 2 Pro smartphone would improve the experience of playing Pokemon Go.

Lenovo unveiled Phab 2 Pro, the world’s first smartphone to put AR technology into the hands of consumers, at a corporate event in San Francisco last month.