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PC maker Lenovo launches 5 smartphones in India

Move follows a perceptible decline in the growth of PC sales worldwide as smartphones, tablets become popular
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First Published: Thu, Nov 01 2012. 05 06 PM IST
Photo: Priyanka Parashar/Mint
Photo: Priyanka Parashar/Mint
Updated: Fri, Nov 02 2012. 12 57 AM IST
Mumbai: Hedging its bets in a world where sales of mobile phones and tablet computers are growing at the expense of personal computers, Hong Kong-listed Lenovo Group Ltd on Thursday said it will sell five Android-based mobile-phone models priced between Rs.6,500 and Rs.28,500 in India.
The move, according to Amar Babu, managing director of Lenovo India Pvt. Ltd, “stems from Lenovo’s 4-screen strategy in the PC+ era, of which smartphones is a key component”.
For Lenovo, the four screens comprise personal computers, tablets, mobile phones and televisions (available only in China). Lenovo is entering the Indian market for smartphones “after having built a strong and successful mobile phone business as the number two player.... in China”, said Babu.
“In China, we reached the number two position in the smartphone category (Samsung Electronics Co. Ltd. is the leader) in less than 18 months,” added JD Howard, Vice President of Lenovo’s MIDH (multimedia, internet and digital home) group, which Lenovo set up to promote newer products like tablets and smartphones.
Lenovo, with a market value of $8.2 billion, faces slowing growth in the market for PCs and competition from the likes of Apple Inc and Samsung in the tablet and cellphone spaces. The Chinese market, which has been Lenovo’s main sales driver and contributes to around 42% of total revenue, is also slowing down.
Moreover, worldwide PC shipments are declining. They totaled 87.5 million units in the third quarter of 2012, a decline of 8.3% compared with the year-ago period, according to preliminary results released by Gartner Inc. on 11 October.
Mobile-phone shipments, however, are increasing at a fast pace.
A total of 102.43 million mobile handset units were shipped from January-June, according to a 27 October report by CyberMedia Research. Nokia India Pvt. Ltd emerged the leader with a 22.2% market share, followed by Samsung India Electronics Pvt. Ltd (13%) and Micromax Informatics Ltd (5.5%).
A total of 5.5 million smartphones were shipped in the same period with Samsung leading with a 41.6% share, followed by Nokia’s 19.2% and Blackberry maker Research in Motion Ltd in the third place with a 12.1%. The leading smartphone operating systems (OSs) were Android (56.4%), Symbian (17.4%), BlackBerry (12.1%), Bada (8.5%), iOS (3.0%) and Windows Mobile (2.6%) on a base of 5.50 million units.
Shipment numbers, however, do not reflect actual sales. It reflects the market size in terms of units of mobile handsets and not their absolute value. Nevertheless, according to Faisal Kawoosa, lead analyst, CyberMedia’s telecoms practice, “The push from vendors and the increasing maturity of the India mobile subscriber community is expected to further push up smartphones as a proportion of total mobile handset shipments in the country in the next few quarters.”
In India, meanwhile, Lenovo managed to overtake Dell Inc. and Hewlett-Packard Co. in PC sales in March, due to the part-execution of a large order of laptops that the Chinese company received from the Tamil Nadu government late last year. Tamil Nadu had announced procurement of 900,000 laptops at about Rs14,000 each. Lenovo, along with HCL Infosystems Ltd. and Acer Inc, had won the contract.
Babu wants to ensure his company’s pole position in India was no fluke. “Our strategy is to strengthen our core businesses while making bigger strides in growth areas--tablets and smartphones being the latest.”
According to research firm Convergence Catalyst, around 1.4-1.8 million smartphones were sold in India every month in the July-September quarter. Samsung had an around 50% market share in terms of volume while Indian brands such as Micromax and Karbonn Mobiles cornered 13-15% share.
There’s a lot of room for new firms to enter the smartphone segment, which is still growing at a fast pace, said Jayanth Kolla, co-founder and partner at Convergence Catalyst. He added that while Lenovo will have to get its sales and marketing strategy right being a late comer in this space, it has a strong brand. “The fact that it’s introducing five models may work in its favour.” he said.
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First Published: Thu, Nov 01 2012. 05 06 PM IST
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