China has a new leader in smartphone sales, and it is a Chinese company: Lenovo has surpassed South Korea’s Samsung Electronics as the nation’s largest supplier handset devices, as confirmed by Reuters.
The overtaking was made possible by sales rises that has exceeded the brightest expectations. Lenovo reported a 20% rise in second-quarter shipments in China, and a 39% global rise in the previous quarter, according to statistics released by market research firm IDC.
Lenovo is closely pursued in China by rival Chinese smartphone makers including Xiaomi, the start-up founded three years ago in Beijing, that controls a large share of the market thanks to its low prices. As Apple discovered, Chinese consumers want it all: high quality, low prices and nice features. Some Chinese smartphone manufacturers are able to provide that at the cost of thin margins, so in many cases consumers choose a domestic product.
Therefore unlike Xiaomi and other domestic competitors, Lenovo does not look at China with much lofty ambitions. Lenovo chairman Yang Yuanqing confirmed that the company considers the Chinese handset market as a “not very healthy market, with many caring only about low-end products and paying no attention to innovation and technological progress,” while “Lenovo is pursuing balanced development.”
Lenovo is consolidating its presence in more profitable markets, namely Eastern Europe and Southeast Asia, where the company’s sales skyrocketed, rising 500% and 300% respectively, in comparison to the previous year. What’s more, profit margins in the said areas are better than that in China.
Yang added that the company hoped to surpass Apple to become the world’s top supplier in combined sales of PCs and tablet computers within two years.
Lenovo is already the world’s larger computer supplier, and is closing in on deals to further diversify its business, purchasing Google’s Motorola and IBM‘s low-end server business. The deals would be worth well over $5bn.
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