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Lenovo is taking on Xiaomi with a new smartphone brand in China
In the Chinese market, two of the biggest smartphone manufacturers are Lenovo and Xiaomi. While Xiaomi has recently gained the number one spot in market share, Lenovo may be working on a way to even things up a bit. According to a report from The Wall Street Journal, Lenovo is building a new smartphone brand to directly compete with Xiaomi in the Chinese market.
Though details are scarce regarding the specifics of the company, we do know this: the new brand, set to be released under a different name, will reportedly launch on April 1st of 2015. Lenovo’s new company is set to focus solely on online sales, while keeping emphasis on branded applications and consumer engagement. Lenovo also made sure to mention that they will continue to sell Lenovo-branded devices through retailers and local carriers.
Lenovo has traditionally had a rather generic business model when it comes to selling phones to consumers: utilize the retailers and local carriers to get their products out. Selling these phones solely online allows them to potentially lower some of the overhead costs involved with a more traditional sales model. Lenovo is also likely drawn in by the (somewhat arguable) success seen by OnePlus, which has an online sales-only model and has mostly relied on word-of-mouth and cheap online marketing to build its brand.
So why use a new brand? Basically it allows Lenovo to get creative and take some risks without it negatively impacting its core brand. Provided the report is accurate, Lenovo will likely be stepping out of their comfort zone a bit here, though it remains unseen whether such a move will pay off in the long run.