Lenovo confident it will unseat Dell as world No 2

PUBLISHED : Wednesday, 14 September, 2011, 12:00am
UPDATED : Wednesday, 14 September, 2011, 12:00am


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Amid fresh fears of an industry slowdown, Lenovo Group is confident of unseating rival Dell as the world's second-largest supplier of personal computers this year.

Lenovo chief executive Yang Yuanqing yesterday said momentum was on the side of the mainland computer maker. 'With our own rapid growth, combined with the successful execution of our joint venture in Japan with NEC and our acquisition of Medion in Germany, we fully expect to be number two in worldwide PC sales this year,' Yang said.

That would be the highest industry ranking Lenovo has achieved since it bought the personal computer division of IBM for US$1.75 billion in 2005.

'We continue to not only outgrow the market, but also significantly outpace our competitors,' Yang said.

Lenovo posted the biggest sales gain among the world's top personal computer makers in the second quarter, vaulting the company past Taiwan-based rival Acer to become the industry's No 3 supplier.

Market research firm International Data Corporation estimated Lenovo shipped 10.28 million personal computers last quarter, representing a 12.2 per cent share of the global market. Lenovo's revenue that quarter also hit a record US$5.92 billion, up 15 per cent from US$5.15 billion a year earlier.

Plans by industry leader Hewlett-Packard to divest its personal computer business may also clear the way for Lenovo and other major Asian players to boost their global market share. Gartner analyst Simon Ye recently said that HP's proposed exit also presented a potential new acquisition opportunity for Lenovo 'if the price is reasonable'.

Hong Kong-listed Lenovo, which has businesses in more than 160 countries, last month announced the expansion of its operations in South America, with the start of production at its new laptop computer factory in Argentina.

The Newsan Group, an Argentinean consumer electronics and household appliances maker, is operating the plant under a new venture with Lenovo, the second-largest personal computer supplier in Argentina.

Gartner, however, forecast last week that worldwide personal computer sales could increase just 3.8 per cent this year, compared with an earlier prediction of a 9.3 per cent growth, due to sharply lower demand in western Europe and the United States in the second half this year, as well as growing competition from complementary computing devices such as media tablets.

'Western Europe is not only struggling through excess PC inventory, but economic upheaval as well,' said Ranjit Atwal, research director at Gartner. 'US consumer PC shipments were much weaker than expected in the second quarter, and indications are that back-to-school PC sales are disappointing.'

George Shiffler, research director at Gartner, said: 'Media tablets have dramatically changed the dynamic of the PC market, and HP's decision to rethink its PC strategy simply highlights the pressure that PC vendors are under to adapt to the new dynamic or abandon the market.'

Although Lenovo has been building up its capabilities to become a large manufacturer of media tablets and smartphones, Yang said that personal computers remain Lenovo's 'very strong core business'.

'We see great opportunity in PCs around the world,' Yang said. 'We are committed to the PC space for the long term and expect it to continue to fuel profitable, balanced global growth for Lenovo.'