Lenovo may be closing the gap on Apple and Samsung when it comes to global smartphone sales, but its position on home turf in China is under pressure from upstart Xiaomi. Predicted to sell at least 60 million smartphones in Asia this year, Xiaomi unexpectedly stole the top spot for smartphone sales in China during the last quarter of business to underline its arrival as a major player. Now Lenovo is taking a leaf out of its young rival’s book in a bid to keep up with the times.
The company announced this week that it is creating a new “smart device company” in China which will open its doors on April 1 2015. Far from an early April Fools’ Day joke, Lenovo’s new unit is rather Xiaomi-looking, based on the few details that it has revealed so far.
While Lenovo will keep its primary smartphone business which sells to consumers via carriers and retail stores, the new business — which does not yet have a name — will adopt an internet-only sales model for selling to consumers. It isn’t clear whether this business will sell phones using the same flash sales model favored by Xiaomi, but Lenovo is aiming to cash in on some of the buzz and excitement that Xiaomi has generated with its fun (and perhaps even cult) approach to online marketing and sales.
In addition to methodology, we can likely expect Lenovo’s new unit to sell phones at similar price points to Xiaomi. The company’s flagship Mi4 device retails for around $300, but its top-selling lower-end Redmi/Hongmi range is priced from around $130.
Lenovo isn’t just looking at hardware, however. The company says that “software and application development and close customer engagement” will also be part of the new business’s focus. It’s not clear what they may entail, but the apps and services appear to be specifically for audiences in China, so don’t get too excited if you live in the rest of the world.
Xiaomi’s mascot is a less tech-focused product available in China
Lenovo does, of course, have Motorola on its roster too. Like Xiaomi, Motorola has adopted a direct-to-consumer strategy via internet sales, but that’s in addition to regular physical retail partners too.
Xiaomi this month announced that it has shipped 45 million smartphones over the first three quarters of this year. It recorded 18.7 million sales last year, but 2014 has seen it massively increase the number of markets that it is active in — beyond mainland China, it now sells to consumers in Taiwan, Singapore, Hong Kong, Malaysia, Indonesia and India. The firm is eyeing an expansion to Latin America — initially via Mexico and Brazil — but its continued development in China is such that Lenovo has decided to pull the trigger on this new initiative.
Given the furor over the apparent similarities between Xiaomi’s Mi smartphones and Apple’s iPhones, it’s more than a little ironic to see a larger competitor go the full distance and spin out its own ‘Xiaomi’ business. I, for one, can’t wait to see whether Lenovo’s phones will resemble Xiaomi’s — the Apple imitation argument might just get another layer in China.
The MI 4 is Xiaomi’s latest smartphone