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Lenovo plans launching dual-SIM smartphones in Africa

By , Editor, ITWeb Africa
Africa , 07 Dec 2012

Lenovo plans launching dual-SIM smartphones in Africa

One of the world’s top selling PC vendors, Lenovo, is to unveil smartphones in Kenya, Nigeria and South Africa next year, as the firm tries to steer through a global computer sales slump.

Research firm Gartner released a study in October that said Chinese PC-maker Lenovo took pole position in worldwide PC shipments for the first time ever in the third quarter of 2012. According to the research, Lenovo in that quarter secured 15.7% of the market, compared to Hewlett Packard’s (HP) 15.5%.

Meanwhile, research firm IDC has ranked Lenovo a close second for that same period.

Yet although Lenovo has risen to become one of the world’s top PC makers, it last month recorded its lowest profit growth in more than two years, as the firm reported a 12.6% rise in quarterly net profit to $162 million.

Analysts say the slowdown in Lenovo’s sales could be because of a dip in worldwide PC sales, owing to more consumers switching to smartphone and tablet devices. Worldwide PC shipments totaled 87.5 million units in the third quarter of 2012, a decline of 8.3% compared with the third quarter of 2011, according to preliminary results by Gartner.

But Lenovo is attempting to adapt to a changing market by focusing more on its its mobile internet and digital home division.

For the six months to September, Lenovo recorded that its PC sales accounted for nearly 90% of its total revenues of $16.7 billion. Its mobile division, however, more than doubled its revenues to $1.3 billion in the same period, thanks to to consumers snapping up its smartphones in China: the world's largest mobile phone market.

Lenovo says it has a 14% share of China’s smartphone market and the firm is hoping to replicate that success in other developing markets by releasing its handsets in Africa next year.

Kenya and Nigeria are part of a third wave that is planned to have entry-level and high-end dual-SIM Lenovo smartphones by mid-2013, following the launch of these devices in markets such as Russia, India and Indonesia.

South Africa is then expected to be part of a fourth wave that is to have the gadgets by the end of 2013.

The exact models of the devices are to be revealed at the Consumer Electronics Show (CES) in Las Vegas next year.

“Traditional PC (sales) as we know it are flat. We don’t see big growth coming out of that,” said Graham Braum, Lenovo’s general manager for Africa, at a press briefing in Johannesburg.

“But we see huge growth coming out of the hybrid, convertible, smartphone, tablet environment from 2013 and moving forward,” Braum added, as he also showed off some of the firm’s latest tablet devices at the event.

Braum explained that South Africa is to be among the last emerging countries to have the Lenovo smartphone devices, owing to the market being more of an operator model as opposed to a retail market for handsets.

He said that testing for smartphones in SA has to be done by four major operators before devices can be released to market and that these operators have strict requirements to unveil phones in specific cycles. In Nigeria and Kenya, handsets can be released immediately onto market straight after testing, and are largely snapped up in retail stores, added Braum.

Research firm Informa Telecoms & Media says that there are just over 100 million mobile subscribers in Nigeria, while the Communications Commission of Kenya says that Kenya has approximately 28 million subscriptions.

South Africa, which has a population of 51 million according to Census 2011 results, has a mobile penetration rate of over 100%, say BuddeComm researchers.

Focusing on these emerging mobile markets could be key to Lenovo’s future African success, says an analyst.

“I expect Lenovo will have success in those emerging markets where terminals are not subsidised by mobile operators, where consumers buy handsets from the open retails market at low prices, such as in Nigeria , Kenya,” lead strategy consultant for the Middle East and Africa Broadband Gurus Network, Sadiq Malik, told ITWeb Africa.

“They will face difficulties in operator controlled handset markets, such as South Africa, where brand and subsidies weigh heavily in the consumers’ purchase decisions,” Malik added.

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