Lenovo's Mobile Internet and Digital Home Business Group will make tablets, smartphones and devices for other categories like smart TV and cloud computing, China's biggest PC maker by shipments said.
The world's fourth-biggest computer maker by shipments behind Hewlett-Packard Co., Acer Inc. and Dell Inc. has already joined other PC makers in launching mobile devices to diversify into new areas and boost margins. In May last year, the company launched LePhone, its first touchscreen smartphone based on Google Inc.'s Android operating system with a detachable Qwerty keyboard.
Lenovo earlier this month also unveiled a hybrid notebook and tablet that combines a high-definition Android-based tablet, called LePad, with a keyboard base that enables the product to operate Windows 7.
Lenovo bought International Business Machines Corp.'s (IBM) PC business in 2005 to boost its business in developed markets, but in 2009 it announced restructuring measures to refocus on China and other emerging markets. The company's focus on mobile Internet comes as it is still also investing heavily to build its market share in emerging markets like Latin America, India and Southeast Asia. That effort and a greater focus on lower-price consumer products have pressured Lenovo's margins.
Lenovo said in November its net profit for its fiscal second quarter ended Sept. 30 rose 44% to $76.6 million from $53.1 million a year earlier, helped by strong growth in PC shipments.
Chief Operating Officer Rory Read said Monday Lenovo will continue to look at acquisitions that would give it a strategic advantage in mobile Internet.
The mobile Internet segment will help enhance Lenovo's margins over three to five years, though the effect may not be significant, Mr. Read said in a phone interview.
"From a standpoint of business opportunity, the next 12 or 18 months are interesting, but the real game at hand is in, you know, 24, 36, 48 months" for devices like those the new unit will make, Mr. Read said.
Lenovo is likely to offer LePad outside China in late summer, after a new version of Android comes out and Lenovo has time to test it, Mr. Read said, adding the tablet may not be called LePad outside China.
Read in April last year said Lenovo believed 10% to 20% of its revenue would come from mobile Internet services within five years, up from low single digits at the time.
Lenovo said Liu Jun, former president of the company's Product Group, will head the new business unit.
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