Allies not rivals, says Lenovo

PUBLISHED : Wednesday, 04 July, 2012, 12:00am
UPDATED : Wednesday, 04 July, 2012, 12:00am


Related topics

Lenovo, the world's second-largest supplier of personal computers, expects its ties with Microsoft to remain strong, despite looming competition with the software giant in the fast-growing market for media tablets.

Microsoft last month unveiled its Surface media tablet, marking the company's bold attempt to directly take on Apple's popular iPad and a slew of other tablets running on Google's Android operating system.

Lenovo chairman and chief executive Yang Yuanqing downplayed Microsoft's foray into a segment of the computer hardware business where Lenovo expected to become a major global player with its ThinkPad and IdeaPad media tablets.

'Microsoft has been and will continue to be one of Lenovo's most valued partners,' Yang said on the sidelines of Lenovo shareholders' annual general meeting yesterday.

Lenovo has been a strong ally of Microsoft and its Windows operating system since the Beijing-founded computer maker expanded its operations from the mainland to more than 160 countries and territories, following its acquisition of International Business Machines' personal computer division in 2005.

But when Lenovo saw an opportunity to diversify its business into 3G smartphones, media tablets and internet-linked 'smart' televisions, the company developed new products to run on its customised version of the free Android platform. Lenovo established its Mobile Internet and Digital Home (MIDH) business unit in January last year to focus on those consumer electronics devices.

'It is our hope that the MIDH business will become the primary driver of growth for the group,' Lenovo chief financial officer Wong Wai-ming said recently. He added that Lenovo was the mainland's No 2 media tablet brand in the first quarter.

While Microsoft's new strategy threatened to disrupt its relationship with Lenovo and other personal computer makers, the world's biggest software company is adamant it can challenge the iPad's dominance in the media tablet market. Two Surface tablets will be released from this autumn, with one model on the Windows 8 Pro platform and the other on the Windows RT system.

Steve Ballmer, chief executive of Microsoft, said: 'The Surface is something new that we think people will absolutely love.'

Market research firm IDC last month increased its global market forecast for media tablets to 107.4 million units this year, up from its previous estimate of 106.1 million. By 2016, worldwide media tablet shipments will hit 222.1 million units.

'We expect pending new products from major players, increasingly affordable mainstream devices, and a huge marketing blitz from Microsoft around Windows 8 to drive increased consumer interest,' said Tom Mainelli, IDC's research director for mobile connected devices.

The iPad's market share is expected to rise to 62.5 per cent from 58.2 per cent last year. Android devices will slip from 38.7 to 36.5 per cent.


The number of media tablets forecast to be shipped this year

-Global shipments may reach 222.1 million units by 2016