Smartphone and Personal Computer maker Lenovo Group Ltd. announced it would form a new Chinese company in the coming year. The new company would focus on selling mobile phones online.
The new company is a part of Lenovo’s strategy to fight off the fierce competition offered by the Chinese Xiaomi Inc., a startup company that sells all its handsets online and generates a fan following through self-made software, entertainment offerings and services.
Lenovo stated on Wednesday that it will sell its devices in China through local retailers and carriers.
The new company will sell smartphones from April 1, 2015 and will sell its devices online along with offering applications and focus on consumer engagement.
Lenovo overtook Hewlett-Packard Co. last year in becoming the world’s largest PC maker. The company quickly expanded its smartphone business for the previous year. In the second quarter of the financial year, Lenovo was the fourth largest smartphone maker in the world, trailing behind Samsung, Apple and Huawei.
Both Lenovo and Xiaomi form the two largest smartphone brands in China, where they sell more smartphones in the market than Samsung or Apple. The two companies have been in intense competition and have shown great interest in being the biggest company in terms of shipments.
Lenovo currently plans to set up a new mobile phone business which was announced in the midst of completing a $2.91 billion takeover of Motorola in the U.S.
Lenovo has maintained that the new smartphone company will focus only on the Chinese market.