Lenovo CEO Urges Chinese Telecom Operators To Reduce Subsidies to iPhone

By Binu Paul email: b.paul@mobilenapps.com | Jan 31, 2013 03:31 AM EST

Lenovo is eying big. Its strategy seems to contain an aggressive push into low-end smartphones to take on its counterparts such as Huawei and ZTE.

On the other hand, the company, after reporting record-high net revenue for the third quarter, announced that it's ready to challenge industry biggies like Apple and Samsung in the mobile consumer sector.

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In its attempt to take on the giants, Lenovo has urged telecom operators to decrease their subsidies for iPhones and reduce 'super-national treatment' for foreign mobile phone makers including Apple and Samsung, the Brightwire reported via Sina Tech. "I appeal to operators to give fewer subsidies to Apple, we are confident to beat Apple," Lenovo CEO Yang Yuanqing said.

Though his plans seem quite vague at this time, Lenovo's talkative chief said mobile phone manufacture's success largely dependents on operator subsidies and has urged domestic mobile phone operators to give Lenovo and other companies a chance to explore and develop in the high-end market.

Lenovo's gross profit for the third fiscal quarter reached $1.1 billion which is an increase of 15 percent year-on-year and its net profits surged to $205 million in the last quarter, a 34 percent year-on-year increase.

Banking high on its record growth, Yuanqing said the company will further explore mobile devices where Apple and Samsung dominate the market and will increase its market share through mergers and acquisitions. It's expected that Lenovo will invest heavy on developing high-end smartphones and this move will take the company into face-to-face competition with Samsung and Apple.

Given the fact that Apple and Samsung are premium brands in the smartphone market with products costing $500 or more in comparison to Lenovo's models (mostly low-end) usually costing $200 or less, it's not clear at this point in time what Yuanqing has in his minds for the Chinese company to take on the market giants. However, the $998 million revenue in the latest fiscal reporting quarter from mobile phone sales seemed to have upped his hopes. Lenovo reported an impressive improvement in its mobile phone sales, up 77 percent from a year earlier, and it's noteworthy to mention that a majority of it came from smartphones.

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