Although Lenovo is on the track to become the No. 1 PC maker in the world, the company recognizes it must compete in other markets as well if it wants to succeed long term. As consumers transition away from traditional PCs to using smartphones and tablets for an increasing number of tasks, companies such as Lenovo are recognizing the importance of focusing on the mobile market for long-term growth and success.
Lenovo's PC business currently makes up the majority of the company's revenue. In the six months to September, 90 percent of Lenovo's total revenues were a result of the PC business. During the same period, the revenue from Lenovo's mobile Internet and digital home divisions doubled, due in large part to smartphone sales in China.
Competition in the mobile market is a bit different from the PC market since consumers tend to be a bit more fickle with regards to brands and features. Currently, Apple and Samsung are dominating the market worldwide. Lenovo's LePhones have gained a following in China. According to IDC, Lenovo is ranked second behind Samsung for smartphone market share in China.
Although Lenovo has enjoyed good sales with its smartphones in China, the smartphone business is loss-making. The company expects to turn a profit in the next few quarters. As Lenovo's smartphone business becomes more profitable, it's likely the company will attempt to expand to additional markets. According to CEO Yang Yuanqing, "We've had success in China. For the next step, we want to expand in the emerging markets first, then mature markets."
In addition to an increased focus and expansion on smartphones, Lenovo is also exploring other mobile markets. Lenovo launched its new Yoga ultrabook last month. This ultrabook runs Windows 8 and features a unique hinge design that enables the ultrabook to convert to a full tablet PC by flipping the screen all the way backwards. Lenovo offers additional ThinkPad and IdeaTab tablets as well.
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