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Lenovo to form new company with focus on smart devices

The Chinese tech giant will form a new subsidiary that will have a different name and branding with an aim to sell directly to customers in China via the internet.

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Lenovo already already has its own smartphones (such as the S850 seen above), but the company is forming a new subsidiary to focus on smart devices. Andrew Hoyle/CNET

It appears Lenovo wants in on the lucrative online sales action that Xiaomi's been enjoying so far. The Chinese tech company known globally for its notebooks will be setting up a new subsidiary next year on April 1 to focus on smart devices and Internet sales in China.

Lenovo's press release says that the new company will have a different name and branding, and will be helmed by its current president of China and Asia Pacific and emerging markets, Chen Xudong.

The company will also move Liu Jun, its current head of the company's mobile business group and the head of the ecosystem and cloud services group, George He, to the new company.

Like Xiaomi, the new company will sell new phones and tablets only through the Internet, skipping the distributors and carriers.

However, despite the vast resources and branding that Lenovo has, the road ahead may not be an easy task.

"Xiaomi isn't just about selling cheaper phones online; developing a cult following will be a challenge if Lenovo is really emulating Xiaomi," says IDC analyst Bryan Ma.

"Xiaomi comes from a software background versus Lenovo's hardware roots. It will be interesting to see how Lenovo measures success of this spinoff. Will it be looking at mindshare over profits?"

Lenovo's not the first Chinese company to try to spin off a more focused brand. Other tech giants such as Huawei and ZTE have also something similar -- Huawei's Honor and ZTE's Nubia comes to mind.

Given Lenovo's strong Asian roots and the fact that the new company's CEO, Chen, is well familiar with the region, it very well could be that Lenovo's new subsidiary will have its sights firmly set on Asia when it debuts next year.