Lenovo's Sweet Cell of Success
By Telis Demos

(FORTUNE Magazine) – One of China's bestselling cellphones may also be its best smelling. Lenovo's new Perfume Phone (which retails for the equivalent of about $210) is a mini sensation in inland cities like Chengdong and Jinan, where Western cosmetics are just starting to catch on with middle-class women. The clamshell phone works its magic by heating a small chamber filled with a few drops of a favorite fragrance, infusing your wrist (or purse or pocket) whenever the phone is turned on. (Metrosexual dudes, beware: The phone also has a "feminine secrets" folder.) But don't hold your breath (or nose) waiting for the Perfume Phone to go global, as it's already proving a tougher sell with cosmopolitan consumers in Beijing and Shanghai.

That said, the phone's initial success is a big deal for Lenovo, which is a company on a hot streak. China's top PC maker completed its acquisition of IBM's PC business earlier this year and introduced a new ThinkPad laptop to rave reviews this fall. With the success of products like the Perfume Phone, its three-year-old handset division is proving that it can create products innovative enough to compete with giants like Nokia and Samsung. Lenovo is now China's sixth-largest mobile seller and the fastest growing of the Chinese brands, according to IDC. PC rivals HP and Dell should consider themselves notified that Lenovo will soon be ready to push its PC-cellphone hybrid, the Smartphone, to Chinese consumers who don't yet have either. If it's a success, CEO Yang Yuanqing will be entitled to taunt, "Can you smell me now?"