Lenovo Turns Attention to Consumers Who Can’t Afford Apple’s iPhone
Chinese multinational Lenovo (LNVGY.PK) recently announced a unique smartphone business strategy that is based on reaching markets where Apple (NASDAQ:AAPL) has not been selling many iPhones, reports Bloomberg. Lenovo plans to triple the number of smartphone markets that it serves within the next several quarters by expanding to emerging markets where most consumers can’t afford Apple’s relatively pricey iPhone.
“We have seen the first wave of success in Asian countries. We provide affordable products for emerging markets. That’s very important,” said Lenovo CEO Yang Yuanqing via Bloomberg. “For those markets, the iPhone is probably not the best selling product, Lenovo can be much more competitive.”
One Asian market where Lenovo has been particularly successful is Indonesia, where it seized 13 percent of the market share in just 12 months. Lenovo hopes to repeat that success in 20 new markets that it will soon serve in Africa, Latin America, and the Middle East. Lenovo’s success in emerging markets helped it beat analysts’ expectations of $9.41 billion revenue for the September quarter. Instead, Lenovo reported September quarter revenue of $9.77 billion, a 13 percent increase, reports Bloomberg.
Although Apple is most popular in developed countries, CEO Tim Cook noted in Apple’s fiscal fourth quarter earnings call that he was “particularly pleased with growth in a number of developing markets with unit sales up sharply year-over-year in Latin America, the Middle East, Russia and India.”
According to IDC data, Lenovo had the largest year-over-year increase among the top-five smartphone vendors in the third quarter this year. Lenovo was the fourth-ranked smartphone vendor during the third quarter with 12.3 million units shipped worldwide.
Although Apple only had a 25.7 percent year-over-year growth rate, the iPhone maker still outsold Lenovo with 33.8 million units shipped in the quarter. Meanwhile, Samsung (SSNLF.PK) maintained its position as the world’s No. 1 smartphone vendor with 40.5 percent year-over-year growth and 81.2 million units shipped. Here’s how Apple has traded over the past five trading sessions.
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