In October 2014, we heard that Lenovo was working on building a smartphone brand to take on China’s Xiaomi. Now more details are surfacing, with reports indicating that Lenovo’s Xiaomi competitor will be called ‘Shenqi’. Also Read - MIUI 13 design teased ahead of launch via latest MIUI File Manager updateAlso Read - Mi 11 Lite first look: A OnePlus Nord CE competitor, is it?
Bloomberg reports that the company is set to begin operations in April 2015. CEO Yang Yuanqing tells the publication that the new device unit can also be taken public, as it might be worth ‘a couple of billion dollars’ after it begins operations. Also Read - Lenovo K13 seems to be a rebranded Moto G10: Take a look
“The Lenovo startup would use a direct-to-consumer, Internet-based business model similar to that which propelled closely held Xiaomi Corp. to the top of the China smartphone market and third-place globally in the third quarter last year,” he confirmed testifying Lenovo’s plans to take on Xiaomi aggressively this year.
He also explains why they are building a completely new brand to push the online-only model. We want to build a pure Internet-oriented model. If we do this kind of model within the current Lenovo, there is a lot of conflict with existing channels and carrier partners. With a different team mechanism, we can do whatever we want.
Lenovo is not alone. Last month Indian smartphone vendor too launched a separate brand, Yu Televentures, to take on Xiaomi with an online-only retail model. Its first smartphone, Yureka, sold 10,000 units in its first flash sale on Amazon yesterday.
Shenqi’s CEO will be current Lenovo’s China head Chen Xudong. Liu Jun, head of Lenovo s mobile unit, and George He, head of Lenovo s ecosystem and cloud services group, will be co-chairmen.
Shenqi will not only on focus smartphones, but also app development and will strive to stay close to its customer base, just like Xiaomi. This Internet-based model is synonymous with Xiaomi that sells its handsets online, which in turn helps it to keep the product pricing low. Xiaomi is also known for being marketing savvy, engaging with consumers through online forums and social networks.
Lenovo and Xiaomi are two of the biggest smartphone makers in China, both selling more phones in the market than Samsung or Apple. It will be interesting to see how this new brand affects Xiaomi’s sales.