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11/30/2009
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Lenovo Buys Back Mobile Unit

The company will spend about $200 million to get its mobile phone unit back in order to focus on mobile Internet devices.

In a shift of strategy, Lenovo will spend about $200 million in cash and stock to buy back its mobile phone unit from a group of investors it sold the division to 18 months ago.

The fourth-largest computer maker in the world spun Lenovo Mobile off about 18 months ago, and it will be paying about twice the amount it sold the division for. The company said it will be using the division to focus on mobile Internet devices, particularly in China where the market for these types of devices is expected to exceed $16 billion by 2014.

Lenovo said it has developed a mobile Internet device that falls between a netbook and a smartphone, and it will be using the mobile division to market and distribute the product. The company did not release specifications on the device, or give an approximate release date.

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

The move comes as the lines between laptops and smartphones continue to converge, and vendors are positioning themselves to capitalize on the shift in how consumers use mobile computing devices.

Nokia, the world's largest handset maker, recently released a netbook with Windows 7 and 3G capabilities, and it is also marketing its high-end N900 phone as a mobile computing device. Computer makers like Acer and Dell have recently jumped into the smartphone space, and Apple has been wildly successful with its iPhone lineup.

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