By Natasha Lomas
Analyst Gartner has just put out a set of predictions for the Chinese market – and it’s expecting a big role for PC and mobile maker Lenovo (OTCPK:LNVGF) in the homegrown smartphone space. Noting that Lenovo has “gained real momentum” in China, Gartner expects the company to take the number one smartphone seller crown next year.
It’s been an impressive surge for Lenovo and its Android-powered LePhone. Gartner notes its smartphone market share rose from 1.7 percent in 3Q11 to 14.8 percent in 3Q12, making it currently China’s No. 2 smartphone brand, ahead of Apple (NASDAQ:AAPL) (6.9 percent) and behind Samsung (OTC:SSNLF) (16.7 percent).
In a conference call with analysts back in August, ZDNet quoted Lenovo’s CEO Yang Yuanqing saying: “Our smartphone sales in China reached almost 5m this quarter. Total phone sales volume reached almost 7m to surpass our China PC volume for the first time. In June our smartphone market share in China reached 13%. Now we have surpassed Nokia and Huawei to become the number two smartphone and the all-phone player for the first time in China.”
Earlier this month, Reuters reported Yianqing saying the company expected its Chinese smartphone business to become profitable in the “next couple of quarters”.
Gartner notes: “[Lenovo] is the only local smartphone player that can compete with global top brands in China, thanks to its household brand recognition, nationwide distribution, strong portfolio and reasonable pricing.”
Lenovo’s smartphones are priced at the mid-to-lower end of the market, and it’s that affordable pricing that Gartner expects to drive much of its future growth — noting that “global brands are less competitive” in this segment.
Gartner said it also expects Lenovo to gain share from open markets where “its brand and distribution are better established than local competitors”.
When it comes to the tablet market in China, Gartner expects shipments of media tablets to match shipments of mobile PCs (such as laptops) by 2016 — noting that media tablets are becoming much more affordable in the region. Gartner expects the average price of media tablets will drop from $262 in 2011 to $176 in 2016, and predicts shipments of media tablets will reach 57 million units in China in 2016, nearly matching mobile PCs at 58 million units.
Gartner also notes that media tablet adoption in China is not limited to the consumer market — with “increasing” demand from many different vertical markets including hospitality, insurance, finance, retail transportation and education.
“China is a market characterized by strong local flavors, especially in the fast growing smartphone and tablet markets,” said Matthew Cheung, principal research analyst at Gartner, in a statement.