Lenovo buys back phone business

PC maker Lenovo said Friday that it is repurchasing the mobile-phone business it divested last year to exploit the growing market in China for hand-held devices that access the Internet.

The $200 million in cash and stock that the Chinese computer maker is paying for Lenovo Mobile Communication Technology is twice the price Lenovo received for the business in March 2008. At that time, Lenovo said it wanted to focus on its core PC business.

Lenovo, which has a headquarters in Morrisville that employs 1,500, said that the switch in strategy stemmed from "changed market conditions" in which PC and mobile-phone technologies are converging.

In addition, the mobile phone business was unprofitable when Lenovo sold it, but now it's making money as consumer demand has increased in China, the world's largest phone market. Lenovo Mobile is the No. 3 brand in China.

"As Lenovo's global PC business continues to make steady progress, we view mobile Internet as a key growth opportunity moving forward globally," CEO Yang Yuanqing said in a prepared statement. Yang is based in Morrisville.

Lenovo Mobile was established in 2002.

Staff writer David Ranii