Lenovo Faces Flagging Profits, Gears Up for Bigger Role in Mobile Device Market

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By Erik Pineda | November 8, 2012 5:48 PM EST

These days, Chinese brand Lenovo is touted as the next big thing in the personal computer business, threatening the hold to precarious lead of familiar names like Hewlett-Packard (HP), Dell and Acer.

In terms of market share, Lenovo indeed leads the pack of global PC manufacturers, swapping the distinction of being the largest PC maker in the world to HP, depending on the research firms that issue the figures.

Yet the problem lies in the traditional PC market, which Reuters said has been reduced to a sunset industry, slowly crumbling under the intense pressure of the mobile device sector that is the past half-decade had grabbed significant attention away from desktops and notebooks.

Global consumers previously enamoured with the yearly cycles of new PC units - all-in-one desktops, ultra-thin laptops and for a time the extra-portable netbooks - got enraptured with the allure first of smartphones and then the tablet computers.

Slowly, the chunky computing tools were being eased out and in their place came the Apple and Android devices. People stopped buying or upgrading PCs, preferring mostly to log online on-the-go, with the sexy and sleek gadgets that mostly delivered on their computing demands.

PC makers do acknowledged that their existence is under threat and they have the shrinking financial numbers to remind them.

For Lenovo, profits are still being registered and the company reported on Wednesday that it netted $US162 million in the quarter ending in September. The firm, which has been muscling out its rivals, is only happy to be raking in millions, and in hundred-millions at that.

But its profits were being dwarfed by the present industry titans bearing the name Apple and Samsung, which every quarter dominates the news with tens of millions of gadget shipments and billions in income.

By comparison, Lenovo's figures are soft, which is reflective of the now cannibalised PC market, analysts said.

The Chinese firm is trying to further shore up its still steady position by ramping up its involvement in the manufacture of smartphones and tablet computers.

The latest Lenovo products geared for that market are the LePhones and Yoga lines, Reuters said.

LePhones is fairly successful, according to IDC, which ranked the Lenovo smartphone as the number two handset, in terms of market share, in China, a huge market that is targeted by every global company wanting to sell just about anything.

Obviously, the China firm is doing well on its home turf and it wishes to do more and in wider territories.

It is doing so by taking advantage of the Android and Windows computing system, the latter represented by the Yoga, which Lenovo hopes will lure significant buys by delivering two forms of PC in one device.

The Yoga, Lenovo said, is a laptop but the screen-part of its shell can be opened up all the way to the back of the keyboard, folding the unit in reverse, thereby making a tablet out of it.

Lenovo is hopeful that playing both the Android and Windows games will give it enough traction to finally pull away from HP and other PC rivals, to gain in roads as well in the now lucrative mobile computing market.

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