Lenovo Group, Ltd. announced it will form a new smart phone company in China next year to compete against Xiaomi, Inc.

The new company, which will run under a different brand name, is expected to operate on April 1, 2015.

The still unnamed company aimed to develop "leading internet-based smart devices and services business" for the Chinese market, Lenovo said in a statement.

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The computer maker's new company will focus on branded applications, consumer engagement and direct smartphones sales to consumers via its online store.

Chen Xudong, president of Lenovo's China and Asia Pacific emerging markets, will become the head of the new company.

With the use of an internet-based business model, the new unit will "exclusively focus on direct-to-consumer sales, marketing and product development," Lenovo added.

In the next few months, Lenovo plans to release further details about the new company's business strategy and products.

The Chinese tech company hopes the new venture will help them compete in the rapidly emerging consumer mobile device market in China.

Lenovo, however, will continue to sell devices and products under its own brand in the Chinese market through local carriers and retailers, reports confirm.