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Lenovo set to target China phone niche
Published on: 2010-04-20
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Lenovo, the Chinese PC maker, said it would release its first smartphone next month, a model based on Google’s free Android operating system and aimed at the consumer drawn to Apple’s iPhone and the BlackBerry, from Research in Motion.

Called LePhone, the device includes “push” e-mail that is delivered without any action on the user’s part, a main feature for the BlackBerry. Lenovo executives said the gadget would come with hundreds of applications tailor-made for the Chinese market, capitalising on the innovation by Apple’s App Store.

“We are ready for a fight with the iPhone,” said Liu Chuanzhi, Lenovo chairman.

Apple is also fighting for a bigger slice of the world’s largest internet market, announcing in February that it would open 25 retail stores in China. It began selling an iPhone with service from China Unicom in October, and while early sales have been modest, Morgan Stanley said Apple could sell more than 4m units in the country a year.

LePhone is part of a significant push by the world’s fourth-largest PC maker to expand into mobile internet services. Lenovo earlier this year bought back Lenovo Mobile, its handset unit, which it had sold little more than a year earlier.

Rory Read, Lenovo president, said the company expected mobile net services to account for up to 20 per cent of its revenues within five years, up from a single-digit proportion now. Downloads of applications from its newly launched app store would make up an important portion of those revenues alongside device sales, Mr Read said.

This puts Lenovo in the company of Nokia, the world’s largest handset maker, in trying to emulate Apple’s success in making money from services rather than just from hardware.

LePhone has a significantly modified version of Android operating system, favouring Chinese internet applications, the company said. The preloaded search engine, for example, is Baidu instead of Google.

Mr Read said Lenovo would concentrate on “winning in China first” before launching the LePhone in other markets. He said the company expected to sell several million of the devices in China over the next few years.

Lenovo declined to give a price for the device but said it would be ‘affordable’. Observers believe it will sell for under Rmb3,000 ($439).

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