Lenovo To Invest $800 Million In Developing Smartphone Technology
Lenovo, one of the worlds largest computer manufacturers since it’s purchase of IBM’s computer line, is set to devour yet another consumer electronics field. Lenovo is set to launch it’s K800 phone at the end of this month, but is also looking to invest $800 million in a new mobile-centric facility. The companies K800 phone is one of the worlds first Intel powered Android smartphones, but the phone itself isn’t so great. In todays smartphone market it’s important to be at the forefront of both new technology and new software. Lenovo’s K800 handset is running on Android 2.3 Gingerbread. To compete in todays market you need Android Ice Cream Sandwich. To top it all off the phone has no LTE support, which again in todays market is a must. So we hope that Lenovo investing so much money, will begin to develop new phones that can easily compete in todays market.
The company is doing incredibly well in todays consumer PC market however. By 2014 the company is predicted to bring in 10 Billion Yuan ($1.59 Billion), and increase to 50 Billion Yuan by 2019. The company came in second in Q1 2012 for PC sales behind Hewlett Packard, accounting for a market share of 13.4%. What’s staggering about these results is that even though Lenovo and HP dominate the PC market, Apple’s Macs account for 25% of the computer market share for Q1 2012. With Lenovo’s predicted increase of market share, it’s expected that they could potentially overtake HP by 2019. Will they do the same in the Mobile phone market, we will see.
The Press Release:
Lenovo Establishes Industrial Base in Wuhan
Lenovo’s new facilities in Wuhan will improve the company’s capacity to innovate in mobile internet market and optimize its global supply chain
Beijing – May 7, 2012: Lenovo Group and the Wuhan government today held a groundbreaking ceremony for the establishment of the Lenovo (Wuhan) Industrial Base. The site will include integrated facilities for mobile Internet product R&D, production and sales. The new facility will help drive Lenovo’s innovation capability in the field of mobile Internet and optimize its global supply chain, helping the Company to develop and deliver new mobile internet products and bring them to its customers even faster. Total investment over the next five years is expected to be approximately RMB5 billion, and the facility will begin operations in October 2013.
“As an industry leader, we are aggressively moving forward into the PC Plus era, and with our Mobile Internet Digital Home group actively engaged, we are accelerating development in smart phones, tablets, and other mobile Internet terminal markets,” said Yang Yuanqing, Lenovo Group chairman and CEO. “We’re determined to firmly seize the tremendous opportunities for innovation in this market, so that Lenovo’s customers have even more opportunities to own our award-winning products, from PCs to mobile Internet devices. “When it begins operations, the Lenovo (Wuhan) Industrial Base will greatly improve our innovative capability and further optimize our supply chain, giving us a solid foundation to win in a broader market.”
The Lenovo (Wuhan) Industrial Base will mainly focus on the R&D, production and sales of smartphones, tablets and other mobile devices that will cover the Chinese and global markets. By 2014 total sales revenue from the industrial base is expected to reach RMB10 billion, increasing to RMB50 billion within the next five years. The facility also has the potential to create nearly 10,000 job opportunities in the coming years, in a variety of related businesses. Included in this number, Lenovo within the next few years expects to employee several thousand R&D and management staff located at Wuhan, focused solely on advancing R&D in mobile Internet devices and application. The Lenovo (Wuhan) Industrial Base will help improve Lenovo’s entire supply chain as well as its R&D and marketing systems, by building even more end-to-end product capability.
As the central city supported by China’s strategy of promoting the development of central regions, Wuhan hosts the nation’s second independent innovation demonstration area after Beijing’s Zhongguancun. Wuhan has benefitted from the government’s efforts to promote the development of China’s central and western regions and has great growth potential, having already attracted investment from many Fortune 500 companies.
At the end of 2011, Lenovo became the world’s second-largest PC maker after being the world’s fastest growing PC maker for nine consecutive quarters. At the same time, Lenovo’s mobile Internet business made significant progress. The company is now a top-three smart phone maker in China with double-digit market share, and the second-place tablet maker with a market share of 16.5%, far ahead of its competitors in the android market.