Lenovo is going back into mobile phones. It sold out originally a few years ago but now it is buying its mobile phone section – Lenovo Mobile Communication Technology – back for $200 million in cash and shares, which is about double what it sold it for in 2008.
Lenovo returns to mobiles
Lenovo Mobile, the company that is being bought, showed a smartphone in September in partnership with China Mobile, the world’s largest wireless operator. This product was targetted to rival Apple’s iPhone.
This new move will help diversify Lenovo’s business but it will not make the company a significant player in the international cellphone market. In fact, its target is China. It said the acquisition "signals that Lenovo is gearing up its efforts in the burgeoning mobile Internet market in China."
Chief Executive Yang Yuanqing said in a statement, "As Lenovo’s global PC business continues to make steady progress we view mobile Internet as a key growth opportunity moving forward globally."
Lenovo’s chief financial officer, Wong Wai Ming, said Lenovo has already made a prototype mobile internet device.
The Wall Street Journal reports China’s cellphone market is dominated by foreign brands like Nokia. Lenovo said Lenovo Mobile now ranks third in China’s mobile handset market by shipments and is the No.1 domestic brand.