Weak smartphone sales force Lenovo’s hand

Beijing: Lenovo Group Ltd. has replaced the head of its smartphone unit, a critical business division that has seen its China sales tumble as Apple Inc. and other high-end phonemakers win over customers with sleeker product offerings.

Li Jun, one of four executive vice-presidents under CEO Yang Yuanqing and a company veteran of 22 years, will be replaced by Chen Xudong, the head of ShenQi, a subdivision that sells mobile devices, the company said in a statement.

Chen takes the reins of the division at a critical time. He must integrate the Motorola unit acquired from Google Inc. for $2.9 billion (Dh10.6 billion) six months ago, while trying to counter a damaging slump in phone shipments.

Lenovo, the fifth largest player in the Chinese market, shipped 22 per cent fewer phones in the first quarter compared to the same period a year earlier, according to research firm IDC. In stark contrast, Apple’s first-quarter China shipments jumped 62 per cent, while Xiaomi and Huawei had gains of 42 per cent and 40 per cent respectively.

Lenovo did not offer a reason for Liu leaving the post but said he would continue for an unspecified period as a special consultant to Yang. Yang told reporters last week at Lenovo’s Beijing conference that China’s smartphone market was really competitive, becoming more saturated and had a growth rate that was moderating or even declining.

He added that the company wanted to “play a different game” from domestic rivals who compete on low prices and have razor-thin margins.

Liu, who previously headed Lenovo’s China operations and founded its mobile division four years ago, said in a Weibo post he was proud to have taken Lenovo to the world No. 3 spot in combined smartphone and tablet sales and had “no regrets and boundless gratitude.”