Lenovo dials up domestic smartphone business

Lenovo Group Ltd has integrated its smartphone business into its China regional group, as part of the tech heavyweight's broader push to refocus on its home country to revive its mobile business.

The new strategy comes after the Beijing-based company recorded double-digit growth in the last quarter, signaling that it is shifting back onto an expansion track. Lenovo is now the second-largest PC maker in the world by shipments.

Liu Jun, president of Lenovo's China region, said the region has led the company's global mobile phone business, as it refocuses its resources into expanding its presence in its native market.

"The move will enable the mobile phone business to access our personal computer business' huge customer base, as well as its sales and service network," Liu said.

According to Liu, the company is adjusting its product and retailing strategy to achieve this transition. "In order to stand out amid the fierce competition, we will feature quality products at affordable prices," Liu said.

Last week, the company unveiled a new smartphone targeted at younger consumers. Priced at 1,288 yuan ($201), the Z5 comes with a full-display screen and dual rear cameras.

In the first quarter of 2018, Lenovo reported $10.6 billion in revenue, up 11 percent year-on-year, which marks its first double-digit growth in the past 10 quarters. Its net profit hit $49 million, a turnaround from its 127 million yuan loss a year earlier.

Xiang Ligang, CEO of telecoms industry website Cctime, said as one of the first Chinese tech brands to go global, Lenovo has made progress in overseas markets. Even its struggling smartphone business has reported relatively good performance in Brazil and other countries, he said.

"It remains to be seen whether Lenovo can gain a bigger presence in China, where the smartphone market is hitting saturation and domestic peers such as Huawei and Xiaomi have very, very competitive products," Xiang said.

According to Liu, the company's emphasis on smartphones, which will play a core role in the internet of things era, is part of Lenovo's broader strategy to transform itself from a hardware maker into a service provider.

"We will also step up our push to develop the internet of things and leverage cutting-edge technologies to enable IT applications in education, manufacturing, retail, healthcare and transportation," Liu added.