Lenovo unseats HP as world's top PC supplier

Mainland computer giant sees more room to grow profitably, while analysts attribute its expansion to an aggressive pricing strategy

PUBLISHED : Friday, 12 October, 2012, 12:00am
UPDATED : Friday, 12 October, 2012, 3:00am

Lenovo overtook Hewlett-Packard in the third quarter to become the world's largest supplier of personal computers, defying a worsening slump in the industry.

Preliminary estimates released by market research firm Gartner yesterday showed Lenovo seized a 15.7 per cent global market share on personal computer shipments of 13.77 million units last quarter, which edged out HP's 15.5 per cent share at 13.55 million units.

That was a record in terms of market share and quarterly shipment volume for Hong Kong-listed Lenovo, which started its worldwide expansion by buying the personal computer division of International Business Machines for US$1.75 billion in 2005.

But estimates from technology analyst firm IDC showed HP, which has been the leader since the third quarter of 2006, clung to its top ranking with a 15.9 per cent market share last quarter against Lenovo's 15.7 per cent.

Unlike Gartner, IDC includes workstations - high-performance personal computers designed for engineering, software development and scientific applications - to calculate quarterly unit shipments.

The difference in findings by Gartner and IDC was dismissed by Lenovo chief executive Yang Yuanqing, who said the firm's ultimate goal was to be "one of the most respected companies in the world".

"What the analysts' figures reaffirm is that Lenovo has continued momentum in the marketplace," Yang said. "Becoming the clear leader in global PC share, of course, remains one of Lenovo's aspirations. But that only represents one more milestone in our journey as a company."

Founded in Beijing in 1984, Lenovo has about 26,000 employees based in more than 60 countries. The company does business in more than 160 markets worldwide.

Gartner said Lenovo had achieved steady market gains over the past two years due to strategic corporate acquisitions and "an aggressive position on pricing, especially in the professional market".

Last year, Lenovo paid about €466 million (HK$4.6 billion) to acquire German consumer electronics firm Medion. It also invested US$175 million in a venture with NEC in Japan, the world's third-biggest personal computer market.

IDC also credited Lenovo's expanded international distribution for its growth in a quarter when total industry shipments declined 8.6 per cent from a year ago. Gartner estimated this decrease at 8.3 per cent.

"Personal computers are going through a severe slump," IDC senior research analyst Jay Chou said, blaming the weak global economy, delayed replacement cycles by businesses, and consumers' strong interest in other devices, such as smartphones and media tablets.

Yang, however, said Lenovo "firmly believes there is room for continued profitable growth" in the personal computer industry.

The firm's share price climbed almost 2 per cent in early trading yesterday before it closed at HK$6.19, up 0.32 per cent.

In the quarter to June 30, Lenovo posted a 30 per cent increase in net profit to US$141 million from a year earlier.