updated 08:10 am EST, Fri November 27, 2009
Lenovo wants full stake in smartphones
Lenovo today said it would buy back Lenovo Mobile, its previously separate cellphone business. The deal, worth $200 million in cash and shares, brings back a division that the company had sold off just last year in a bid to save money. In justifying the reversal, the computer maker said that PCs are converging with smartphones and that there would be a "significant growth opportunity" to have a stake in handheld devices.
The move is possible partly as Lenovo has recovered swiftly from its bleak outlook of last year. It roughly doubled its profits in its recently ended quarter to $53 million.
Lenovo Mobile is relatively small but has risen to prominence in its native China during recent months as one of the key partners behind China Mobile's Ophone initiative, which focuses on smartphones running a custom variant of Android known as the Open Mobile System. Lenovo's Ophone O1 is one of the flagship devices and is considered by many to be the government-sponsored alternative to the iPhone.