Lenovo is reportedly planning on starting a smartphone company in China next year to focus on selling phones online. The new smartphone company is Lenovo’s efforts to take on Xiaomi, the Wall Street Journal reports.
The report states that this Lenovo offspring will start its operation on April 1, 2015. It will not only 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.
The report further states that Lenovo and Xiaomi are two of the biggest smartphone makers in China, both selling more phones in the market than Samsung or Apple. In recent quarters, Lenovo and Xiaomi have been competing intensely against each other for the number-one position by shipments.
This move comes, even as Lenovo is still in the process of completing a $2.91 billion acquisition of Motorola Mobility from Google. Lenovo is also in the process of closing its $2.3 billion acquisition of IBM’s x86server business, which includes many IBM products like System x, BladeCenter, Flex System blade servers and switches, NeXtScale and iDataPlex servers among other things.