Lenovo which reported a sharp decline in smartphone sales for Q1, 2016, has stated that the company will start selling its handsets at cost in order to boost sales and remain competitive in China.
Lenovo Mobile Business Group President, Cheng Xudong stated that the company plans to sell their products at cost and will not be making any profits from their smartphones in order to stay competitive in the maturing Chinese market.
Lenovo is backing on its Motorola and Zuk branded smartphones to help increase its presence in the Chinese markets. Mr. Xudong stated that the company had priced the ZUK Z2 and ZUK Z2 Pro affordably, even though they have high-end specifications in order to boost sales. The company has managed to outshine other Chinese brands like Xiaomi, Meizu and Huawei in terms of pricing with its latest Zuk devices.
The ZUK Z2 which ships with Snapdragon 820 SoC with 4GB of RAM and 64GB of internal storage is priced affordably at $273, while the ZUK Z2 Pro which also has Snapdragon 820 SoC with 6GB of RAM and 64GB / 128GB of internal storage is available for $416 which is half the cost of flagship devices like Samsung Galaxy S7 with similar specifications. If this strategy works in China, Lenovo may even use it to boost its global sales as well.
Lenovo reported 32% decline in sales in Q1, 2016 from a year ago. The company reported anet loss of $128 million for the year ending March 31, 2016. In comparison the company had reported revenue of $829 million the previous year. It will be interesting to watch whether the company's new strategy will help it in boosting its smartphone sales!
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