The world’s second largest manufacturer of Personal computers, Lenovo Group Ltd., is looking at snapping up firms that can help achieve its expansion goals in the mobile sector. The Chinese firm wants to keep its current growth rate and increase its competences by acquiring firms that can fill in the gap in specific areas that the company has targeted.
The ambitious plans of Lenovo are slowly paying off and the company is fast catching up with the current PC market leader, Hewelett-Packard, as shipments to global clients increase. Lenovo is experiencing the fastest growth in sales for the past six years and the firm is actively trying to keep itself on pace to achieve its goals. Yang Yuanqing, Chief Executive Officer of Lenovo, explained the strategy by stating, “We would fully leverage this tool if the target is consistent with our strategy. Any area which is consistent with our strategy where we are weak, we would like to consider acquisitions.”
Recently the Chinese firm leap-frogged Apple in the third quarter of the year and became the second biggest seller of smartphones in China. In order to continue with the expansion in this lucrative sector, Yang has stated that his firm will launch 40 new models of mobiles by next year. According to the CEO, Lenovo’s large offering of devices is a different strategy from their competitors like Apple, who seek to use just one model like the iPhone to cover all customers. Yang added, “We will have multiple models to cover different price bands. We will have a much broader, wider product portfolio. Our development cycle will be much faster than our competitors.”
Lenovo is a relatively new comer to the smartphone market and first started selling in China 2.5 years ago and already plans to enter markets like India, Philippines and Indonesia in the next couple of months. Even with all the growth and expansion, the company loses money on its phones but Yang is optimistic that they will start turning a profit soon.
Lenovo is not just stepping up its efforts in mobile and wishes to compete against electronics giants like Samsung and has started development of tablets and Internet-ready televisions. According to analysts, any acquisitions that do take place will probably be in Europe, North America or a Japan. The company will may look at firms that enjoy a solid market share in their sector.
Source: Bloomberg
Photo: GSMArena
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