Lenovo and Shanghai Media Group form JV to offer mobile-internet video services

22 March 2011 17 h 34 min 3 comments

Lenovo Group and a subsidiary of Shanghai Media Group (SMG) signed an agreement to create a firm that would provide mobile-Internet video services.

BesTV New Media Co., a subsidiary of SMG, owns 51 percent of the venture, named Shanghai Video Cloud Company Limited, while Lenovo owns the remainder. The total investment of both parties in the new firm could exceed 10 million yuan (1.52 million U.S. dollars), according to the agreement.

Lenovo is currently the largest personal computer maker in China and the world’s No. 4 PC maker. BesTV New Media is the major provider of Internet Protocol Television (IPTV) in China (with 1,3 million subscribers) as well as content provider for mobile television and other forms of new media. BesTV will provide content (from the many SMG TV Stations) for Lenovo’s devices. Users will have to pay for the on-demand video content from SMG. Lenovo will distribute the content to its PC, handset and TV users through its online application store opened last year. “In this Internet era, we hope to expand distribution channel through the cooperation,” said Li Ruigang, SMG’s president. The system will be rolled out in Shanghai this year, and deployed in other cities soon after that. No details on pricing have been released. This deal is not exclusive. On 11 March, the japanese brand Sharp launched its first Internet TV product for the China market, with content to be provided by Shanghai Media Group subsidiary BesTV.

The future of Internet TV in China

The same day, LENOVO Group Ltd announced the launch of its own brand of televisions with Internet functions by the end of this year, “another move for China’s largest personal computer maker to expand into the Internet sector”, the Beijing-based company said today. “We will provide consumers products and services covering all devices from Internet TV, computer, tablet computer to mobile phone,” Yang Yuanqing, Lenovo’s chief executive, said at a press conference in Shanghai. The company also plans to launch LePad Android Slate later this month, which is expected to challenge Apple’s iPad in the domestic market. Lenovo is preparing to launch Internet TVs by the end of this year, company officials said but declined to reveal more details. Compared with the PC industry with a profit margin of less than 10 percent, Internet TV business could provide Lenovo and partners substantial income. Lenovo aims to raise the income from these services to between 10% and 20% of the group’s total revenues in the next five years

SOURCES: Lenovo, SMG, Xinhuanet, China Bidding (21/03/2011)

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