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Could BlackBerry Lift A Page From Xiaomi's China Tactic?

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Lenovo Group Ltd. (OTC: LNVGY) is stealing a lesson on marketing from fast-growing China smartphone maker Xiaomi and some have asked whether long-struggling BlackBerry Ltd (NASDAQ: BBRY) could benefit from the same game.

Xiaomi came out of nowhere this year to dominate the smartphone market in China with a 14 percent share by selling its devices at cost exclusively through its company Web site. Xiaomi seeks to make money by selling apps, games and other services, according to the New York Times.

The smaller BlackBerry has said recently that it hopes to return to revenue growth by focusing on high-end corporate and business customers, while cutting costs, according to The Wall Street Journal.

Beijing-based Lenovo said this week it will launch an Internet-based smart devices and services business in China next year under a separate name and brand, which a number of reports suggest is a "me too" move to emulate Xiami's business model.

Lenovo, which seemed to spring suddenly on the world stage with its 2005 acquisition of IBM's PC business, has seen impressive success with smartphones as growth in its core market slows. Lenovo's worldwide smartphone sales grew 39 percent in the first quarter, when it briefly took the top spot in China's market from Samsung.

Lenovo expects to beef up its smartphone segment with the pending close on purchase of Motorola Mobility from Google Inc (NASDAQ: GOOGL) in a deal worth more than $5 billion.

BlackBerry, with total 2013 revenue of $6.8 billion, saw its China smartphone market share slip from 0.01 percent to zero last year, according to a report from the research firm Kantar.

Yet in the quarter ended August 30, BlackBerry sales in the Asia-Pacific region fell to $140 million, or about 15 percent of total sales -- down from $277 million, or 17 percent of sales a year earlier.

Whether BlackBerry can boost those China numbers by following Lenova's lead as some have suggested is an open question.

Posted-In: XiaomiNews Rumors Global

 

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