Lenovo, the world’s largest PC maker, is going to try to become the world’s biggest smartphone maker.
It just reported solid second quarter earning where its profits grew 23%, and its revenue grew 18%.
After earnings, Yang Yuanqing, the CEO of Lenovo, talked to the Wall Street Journal. He was asked about he could topple Samsung to become the biggest smartphone maker in the world.
“The smartphone market’s focus is shifting from premium products to mainstream and entry-level products,” Yang said. “We have seen this before in the PC market, and we have a lot of experience in these kinds of transitions.”
He added that Lenovo’s expertise in building mainstream and entry-level products will help it as it competes with Samsung.
Lenovo is a serious threat for Samsung. It is already number one in China smartphone sales. It’s about to own Motorola, which, despite its struggles still has a strong brand in developed markets.
But Yang warns that the Chinese market is pretty crazy.
“I would say China is the most competitive market in the world. There are so many local players, and some of them are not logical in how they do business,” says Yang. “They don’t want to make money in the short term. We definitely don’t want to lose our leadership position in China, and we must balance growth in market share with profitability. Our smartphone business in China make a little bit of money, but not so much.”
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