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"I think the problem lies with their high-end portfolio. Lenovo has no strong high-end flagship portfolio to create a halo effect and help the overall business," Peng said. She said Lenovo is in an important transitional period after acquiring Motorola, which may help the company get high-end users.
The embattled Lenovo is yet to release a market magnet that can compete with Xiaomi's Mi Note Pro and Huawei's P8.
Huang Leping, an analyst at Nomura Securities Co covering Hong Kong-listed tech companies, said: "Lenovo should reconsider its position in the country and cut the products that have smaller profit margins."
Chinese smartphone shipments saw their first dip in six years in the first quarter, indicating intense competition, according to IDC. Xiaomi and a number of emerging local vendors are engaged in a price war to grab market share.
Lenovo's Yang said last week his company will not trade off profit margins for a bigger presence in the market. "Price wars are not a solution for us. Instead, we should focus on hardware design and offer one-stop services to win customers," he said.
