Lenovo shoots for the stars in smartphones

Lenovo aims to become the top smartphone player in China within two years.

In previous interviews, Chief Executive Officer Yang Yuanqing has said Lenovo needs another successful transition, since the traditional PC business is in structural decline. Yang said that smartphones are Lenovo's new opportunity.

Analysts have been taken by surprise at Lenovo's surge in the smartphone sector, because it only announced plans to expand in the mobile phone sector about three years ago. In 2008, Lenovo sold its mobile business to "concentrate on the PC sector" but bought it back a year later.

"Lenovo's close ties to Chinese telecom operators have been a major reason for its success in the domestic market," said Li Yanyan, analyst with Beijing-based research firm Analysys International.

"Through cooperation with carriers, Lenovo swept the Chinese market by offering a large quantity of low- to mid-end smartphones. Now, the company also wants to explore the high-end smartphone market," she pointed out.

However, Lenovo has to reduce its reliance on the home market and grow its businesses internationally, said Nicole Peng, an analyst at research firm Canalys. "To go global, Lenovo needs to invest in patents and establish local teams and channels."

Liu said, "We have very aggressive plans to explore overseas markets."

The company has tested the waters in several emerging countries, including Russia, India and Indonesia, since last year and the results have been encouraging. In some of those markets, Lenovo smartphones garnered a 5 percent share within three months, according to the company.

Liu added that Lenovo will enter 30 more emerging countries by year-end. By then, the company will realize its goal of covering 80 percent of emerging markets worldwide.

More meaningful moves are in store for the first half of next year, when Lenovo plans to introduce its smartphones to mature markets such as the US and Europe, Liu disclosed.

"We hope the overseas market will contribute more than half of Lenovo's total smartphone revenue in the long run," Liu said.

Globally, Lenovo ranked as the fourth-largest smartphone vendor in the second quarter, shipping a record 11.3 million handsets behind Samsung, Apple and LG Electronics Inc, according to IDC.