Lenovo shelves plans to sell smartphones in US

Chinese smartphone maker believes it should first beef up its brand awareness in Latin America and Brazil, before making its way to the U.S. market in the next two to three years.
Written by Cyrus Lee, Contributor

Deviating from mid-2013 when the company spoke openly about its plans to start selling smartphones in the U.S. in 2014, Lenovo executives at this weeks Consumer Electronics Show (CES) demonstrated more caution in discussing the Chinese smartphone maker's U.S. strategy.

At the show in Las Vegas, they were either unable to offer any specific timeframe or provided very vague answers to queries from reporters, Sina news reported on Friday. Gerry Smith, president of Lenovo Group in Americas, told Sina the company would first establish its smartphone brand in Latin America and Brazil, then enter the U.S. market in the next two to three years.

Smith indicated Lenovo would carefully select the right time to enter the U.S. smartphone market. Before doing so, the company will be looking to beef up investments on the brand and waiting for the right time, with the right product, to enter the market.

His cautious remarks differed from that of CEO Yang Yuanqing, who said in mid-2013 that Lenovo would start selling smartphones in the U.S. within a year.

Liu Jun, senior vice president of Lenovo Group, said the market remained a coveted one for the company. "As a global brand, success in the U.S. market is a must," he said. But Liu acknowledged the company faced great challenges to succeed in this market.

He also revealed Lenovo's strategy for its smartphone business was focused on achieving success in China, followed by emerging markets. Success in the U.S. market is in the third phase of the company's smartphone strategy, he said, noting that it was now focusing on the latter part of the second phase.

According to Gartner, Lenovo's smartphone shipments exceeded 10 million in the third quarter of 2013, making it the world's third-largest smartphone vendor after Samsung and Apple. IDC numbers, released in late-October, placed Lenovo in fourth place in terms of unit shipment in the third quarter of 2013, after Samsung, Apple and slightly behind Huawei, which had a market share of 4.7 percent globally.

Both research firms indicated that Lenovo's smartphone business relied heavily on its stronghold in its domestic market, China, where the manufacturer sells an overwhelming majority of its devices.

However, the lack of confirmation it will play in the U.S. market soon has stymied the company's expansion to the market, according to the Sina news report. Lenovo Group CMO David Roman told Sina brand awareness was a key issue for the company to enter the North American market.

Roman added that only 4 percent of Americans would consider a Lenovo PC four years ago, but this figure has since increased to 27 percent. Apart from the PC business, though, the company's brand awareness including in smartphone products remains weak in the country these days.

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