Lenovo to spend $800 million on a Chinese industrial base dedicated to mobile devices

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Lenovo is one of the world’s largest PC makers, but they know that they future is all about smartphones and tablets. Despite several attempts to enter the mobile device market, Lenovo hasn’t been satisfied with what they’ve accomplished, so today they’re announcing that they’ve started construction on the “Lenovo Industrial Base” in Wuhan, China. It’s expected to cost about $800 million and the estimated date of completion is October 2013. The company says that this new base will create 10,000 jobs in various fields, with the primary focus being research and development.

“We’re determined to firmly seize the tremendous opportunities for innovation in this market, so that Lenovo’s customers have even more opportunities to own our award-winning products, from PCs to mobile Internet devices. When it begins operations, the Lenovo (Wuhan) Industrial Base will greatly improve our innovative capability and further optimize our supply chain, giving us a solid foundation to win in a broader market.” — Yang Yuanqing, Lenovo Group chairman and CEO

The bigger question is does China have room for a third player? Huawei and ZTE are kicking ass and taking names. Both of them have deep relationships with operators because they also make infrastructure equipment. We’re not suggesting that Lenovo doesn’t have what it takes, but we’d like to point out that it’s certainly going to be an uphill battle. Most folks don’t remember the monumental December 2004 announcement of Lenovo buying IBM’s PC business. Are they going to do a similar acquisition to enter the mobile game? We can only speculate at this point. The latest rumors say that Huawei is going to buy Motorola Mobility once Google is given the green light to purchase the company. Maybe Lenovo would be a better suitor?

All we know is that anything is possible. Five years ago Apple entered the smartphone market and turned things upside down. One year ago Nokia announced an alliance with Microsoft. One month ago a South Korean company became the largest handset maker on the planet.

In other words, expect more craziness.

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