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Lenovo sees potential in cellphones

Lenovo Group Ltd (聯想), the world's third-biggest PC maker, said mobile phones may become the company's second-largest business after computers.

"Our handset sales volume and revenue is doubling from a year ago every month and we hope this will become our second pillar," said Chen Shaopeng (陳紹鵬), 36, Lenovo's vice president and general manager of China, in a conference broadcast on the Internet.

In the second quarter, Lenovo was the biggest local maker of mobile phones in China and was the fifth-largest including foreign brands, Chen said.

In the three months ended Sept. 30, Lenovo sold 1.4 million mobile phones, a rise of 139 percent from a year earlier, the Purchase, New York-based company said in its earnings statement on Nov. 1.

The revenue from handset businesses, mostly from China, more than doubled from last year to HK$1.1 billion (US$142 million).

Overseas phone makers such as Finland's Nokia Oyj and Motorola Inc are trying to win market share in China as it prepares to introduce high-speed wireless licenses, which may spur demand in the world's largest cellphone market by users.

China had 378 million subscribers at the end of September.

Competition intensified after China approved 16 companies in the first nine months of this year to make and sell handsets.

Huawei Technologies Co (華衛科技), BenQ Corp (明基電通) and other manufacturers will add an annual production capacity of 25 million mobile phones.

Lenovo is also planning to develop other businesses such as printers and digital products, Chen said.

For the first half, profits rose to HK$711.2 million from HK$626.9 million a year earlier, Lenovo said in a statement to the Hong Kong exchange.

Revenue climbed to HK$48.1 billion from HK$11.5 billion.

Lenovo, which bought International Business Machine Corp's money-losing PC business in May for US$1.25 billion, plans to consolidate manufacturing in China to lower costs and to target consumers and small businesses in emerging markets to expand sales.

The company's shares fell 0.7 percent to HK$3.775 yesterday in Hong Kong. The shares have risen 62.4 percent this year, compared with a 4.6 percent rise in the benchmark Hang Seng Index.
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