Lenovo to Expand in Africa as Smartphones Debut in Nigeria
Lenovo Group Ltd. (992), the world’s largest maker of personal computers, plans to expand its smartphone business in three west African countries this year as it builds on a surge in demand in Nigeria.
The company will sell models of data-enabled phones including the Vibe X, S650 and S930 in Nigeria starting in the first week of March, Graham Braum, Beijing-based Lenovo’s general manager for Africa, said in a Feb. 4 interview in Lagos. The company may start sales in Ghana and Ivory Coast later in the year, he said.
“Smartphones are fast becoming a primary platform for work, entertainment and social networking” in Nigeria, Braum said. Africa’s most populous nation with 170 million people is the next big market for Lenovo following a “successful” entrance in the United Arab Emirates and Saudi Arabia, he said.
Lenovo agreed to buy Google Inc.’s Motorola Mobility phone unit for $2.91 billion last month as it builds up its smartphone business to offset dwindling PC sales. The deal creates the world’s third-biggest smartphone vendor, behind Apple Inc. (AAPL) and Samsung Electronics Co., both of which already sell phones in Nigeria.
Lenovo is assessing Ghana and Ivory Coast and hasn’t set a time for when it will begin to sell phones there, Braum said.
“We have a road map in 2014 to move into countries like Ghana and Ivory Coast and in order to do that we are doing a lot of investigation in the background,” he said. The company wants to add more countries in the region in 2015, he said.
Lenovo shares gained 2.4 percent to HK$8.62 at the market close in Hong Kong, paring this year’s decline to 8.6 percent. About 92 million shares traded, or 1.7 times the three month daily average.
Nigeria had 156 million mobile-phone subscriptions as of October 2013, according to the Nigerian Communications Commission. With many subscribers owning more than one phone, user numbers will probably grow to more than 200 million in 2017, London-based research company Informa Telecoms & Media estimates.
While Lenovo is entering the Nigerian smartphone market after many of its competitors, it’s confident that customers will accept its phone brands in the same way they did its PCs, which have a 14 percent market share, according to Braum.
“We want to be one of the five top players within the next 12 months,” he said.
“If Lenovo implements the strategies that made other companies from emerging markets successful, it stands indeed a good chance of winning rapid market share,” Anna Rosenberg, senior analyst for Sub-Saharan Africa at Frontier Strategy Group, said in e-mailed comments.
“Companies from emerging markets are growing faster than Western multinationals because they are less risk averse, more flexible in responding to the realities on the ground, and they benefit from competitive advantages such as offering lower prices.”
Lenovo’s competitors include BlackBerry Ltd. (BBRY), Nokia Oyj and Tecno Telecom, while China’s Huawei Technologies Co. released its Ascend P6 smartphone in Nigeria in September in an effort to double its annual sales in the country to 200,000 units.
Lenovo is offering seven phone models to attract a wide range of Nigerian customers with features such as front and rear cameras, Braum said.
“While the PC market still represents a $200 billion opportunity and offers substantial opportunity for profitable growth, most of the new growth will be in the PC Plus market, which includes tablets and smartphones,” he said, referring to the global market.
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