China’s PC maker Lenovo ‘ready’ for Iran expansion

Lenovo reports 'great year of growth' in Arab Gulf markets

Paul Crompton
Paul Crompton - Al Arabiya News
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China’s PC maker Lenovo, which announced last week a record $38.7 billion full year revenue, is “ready” to expand into Iran when international sanctions on the country are lifted, a spokesman has said.

“We’ll follow very closely what happens, and if the sanctions get lifted and if we can do business proactively with Iran, then we’re ready to do so but we’ll just wait till such day arrives. We’re ready,” Aymar de Lencquesaing, president of Lenovo’s Europe, Middle East and Africa division told Al Arabiya News last week during a meeting with journalists in the city of Wuhan in central China.

The dispute over Iran’s nuclear program has for years locked many global firms out of the oil-producing nation of 76 million people.

But after talks between the Iran and six world powers in November, the possibility of sanctions being lifted if it agrees to permanently curtail its nuclear program has made some businesses bullish at their future prospects there.

Last year, Lenovo - known for its notebook business after acquiring IBM’s consumer division in 2005 - expanded its burgeoning smartphone business in the neighboring Gulf countries of the United Arab Emirates and Saudi Arabia, and is now expanding further.

In under a year, it now reports almost 12 percent market share in the UAE, putting it in third place in the country. In Saudi Arabia it trails behind at about 3 percent.

“We had a great year of growth in all the [countries] in the Middle East, and in fact, in 2014, this year, you'll see us push into a number of key markets,” Lencquesaing said earlier in the week.

Aside from expanding into new markets, Lenovo is also focusing on its purchase of troubled U.S.-based mobile phone maker Motorola, a $2.9bn deal that is currently pending approval from both the Chinese and U.S. authorities.

As Lenovo is not normally known for smartphones – having produced its first high-tech mobile device in 2010 - snapping up Motorola gives it instant access and recognition in worldwide markets.

Buying Motorola – which had previously been bought by search giant Google – gives Lenovo access to its world-famous brand, among numerous other benefits, company chief Yang Yuanqing said during the same press briefing in Wuhan last week.

“The Motorola deal will definitely give us what we want to get… a worldwide well-known brand,” said Yuanqing.

Snapping up the brand also enables the Chinese firm to take up Motorola’s long-standing relationships with major carriers worldwide, particularly in North America, Latin America, and Europe – as well as access to its intellectual property, he added.

The deal will see Lenovo acquire 2,000 patent assets as well as trademarks.

But in addition to international competition, the company chief also sees the acquisition as a way to fend off competition from other growing Chinese smartphone companies.

“Most of the Chinese smartphone companies…cannot get this IP position. It would be very hard for them to compete in the mature markets, U.S., Europe,” he said.

“If you combine this with Lenovo’s current capability, big scale, operational efficiency, and faster development capability… we will become very strong.”

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