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Lenovo will establish a new company focused on building a “leading internet-based smart devices and services business” in China next year.Taking on the likes of rapidly growing competitor Xiaomi, the company will become operational on April 1, operating under a yet to be announced separate name and brand.
Xiaomi became China’s leading smartphone vendor for the first time in the 2014 second quarter, capturing a 14% share of the market on the back of 240% year-on-year growth, according to research firm Canalys.
Lenovo’s new company will employ an apparently similar business model to Xiaomi, based around online sales, as it seeks to win market share in the world’s largest smartphone market.
The company will exclusively focus on direct-to-consumer sales, marketing and product development, using an internet-based business model, as opposed to Lenovo’s current smartphone business, which sells mainly through open-market sales and carrier relationships.
“The objective of this move is to help Lenovo attack the fast-growing consumer mobile device market in China, with a focus not only on devices, but also on software and application development, and close customer engagement,” Lenovo stated in announcing the move.
Details about the company’s legal structure, financing plans, business strategy, product plans and organisational structure will be announced in the next few months, Lenovo advised.
