Chinese personal-computer giant Lenovo Group Ltd. says its unprofitable smartphone business will become an engine for its growth. But some analysts think the company should concentrate on its PC business, instead of getting distracted by smartphones.

In the global PC market, Lenovo is close to becoming the largest player. Research firm IDC estimated Lenovo's market share by shipment was the second largest in the world at 15.7% in the quarter through September, slightly behind Hewlett-Packard Co. HPQ -1.52%'s 15.9%. While overall PC shipments declined 8.6% in that quarter, Lenovo's shipments grew 10%, according to IDC. This week, Lenovo reported that its net profit for the fiscal second quarter through September rose 13%, while revenue grew 11%.

If Lenovo is the PC market leader, why does it need to diversify?

One possible answer is that the PC industry has little room for growth. The idea that tablets are eating into PC sales is true to some extent in the U.S. and other developed markets where most people already own PCs. Still, in many emerging markets in Asia, Latin America, the Middle East and Africa, people are still buying their first PC.

In a CLSA survey of consumers in China, India and Indonesia released last month, respondents considered PCs a necessity, but not tablets.

Lenovo Chief Executive Yang Yuanqing said this week that the company's PC business has room for growth in emerging markets where PC penetration is still low. Its recent acquisition of Brazil's CCE was the latest effort to increase its presence in emerging markets outside China.

Meanwhile, the company has been spending more on its mobile device business. Last year, it created a new business unit that focuses mainly on smartphones and tablets. Earlier this year, it announced plans to spend $800 million to build a new base in China for production and development of mobile products.

Mr. Yang said this week that the company expects its money-losing smartphone business in China to become profitable in two to three quarters.

Still, some analysts say Lenovo's recent focus on the smartphone business is distracting the company from efforts to tap potential PC demand in emerging markets. While Lenovo's PC business can continue to benefit from economies of scale, it's unclear how its smartphones can become competitive globally, they say.

'Lenovo should focus on selective emerging markets and try to expand their PC business in those markets,' said Sanford Bernstein analyst Alberto Moel.

Lenovo's smartphone push is a risky bet in terms of earnings. While the handset business may contribute to revenue, its profitability remains uncertain.

The mobile market may be a goldmine for Apple Inc. AAPL +1.73% and Samsung Electronics Co. 005930.SE -0.07%, but fat margins exist only in the high-end segment dominated by the iPhone and Samsung's flagship Galaxy models, said Nicolas Baratte, head of CLSA's Asia Pacific technology research. Most other handset makers are locked in a cutthroat price battle that leaves very thin margins. 'It's a very, very tough market' for newcomers, said Mr. Baratte.

While Lenovo is a widely recognized brand in China, it faces fiercecompetition in the country's crowded mobile market from other Chinese handset makers like Huawei Technologies Co. and ZTE Corp. 000063.SZ +1.07%, which are also trying to offer more smartphones with higher price tags in addition to low-end models.

Outside China, where the Lenovo brand isn't as strong, challenges are even greater. Lenovo recently started selling smartphones in India, Indonesia, Vietnam and the Philippines, and the company plans to expand into more emerging markets.

Lenovo's smartphone strategy 'would make more sense if the company were concentrating on the Chinese market,' says Mr. Moel.

In China, Lenovo can at least take advantage of its brand, but the environment will be much tougher in other markets, he said.