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Lenovo

Lenovo Group is a Chinese technology group whose products include PCs, tablet computers, mobile phones, servers, computers, tablet computers, mobile phones, workstations, servers, electronic storage devices, IT management software and smart TVs. Lenovo is the world’s largest PC maker, and markets the ThinkPad line of notebook computers. Originally known as “Legend”, it changed its name to help international development. Lenovo bought IBM’s personal computer business in 2005 and has maintained a substantial research and development presence in North Carolina.

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Lenovo hunts for growth in a shrinking global PC market

Despite the industry slump, chairman remains confident because of the firm's traditional strongholds in the business segment and the mainland

PUBLISHED : Thursday, 11 July, 2013, 10:51am
UPDATED : Friday, 12 July, 2013, 4:45am

Despite slower sales in the second quarter, Lenovo overtook its chief rival, which was plagued by an even sharper decline, to reclaim its crown as the world's largest supplier of personal computers.

The company expects to gain more market share and boost profitability in an era when media tablets and smartphones are generating stunning growth.

Yang Yuanqing, the chairman and chief executive of Lenovo, said: "The personal-computer market is changing, but it still represents a US$200 billion [per year] opportunity."

Technology research firms IDC and Gartner released separate preliminary estimates yesterday of global shipments of PCs in the second quarter, when Lenovo surpassed perennial market leader Hewlett-Packard as the world's top supplier.

It was the fifth consecutive quarter of declining shipments, the longest such slump experienced by the industry.

IDC estimated an 11.4 per cent fall in second-quarter shipments to 75.6 million units from a year earlier, while Gartner calculated a 10.9 per cent decrease to 76 million units.

Gartner said Asia-Pacific shipments fell 11.5 per cent year on year to 26.8 million units as all markets in the region showed weakness.

In a recently updated forecast, IDC said shipments would drop to 321.9 million this year from 349.2 million.

That reflected a shift in buying trends as consumers increasingly delay their purchase of a PC or use tablets and smartphones for more of their computing needs.

However, Yang said Lenovo could seize market opportunities better than its competitors during this slump because of its traditional strongholds: the business segment and the mainland, the world's biggest consumer of PCs.

"Balancing growth and profitability across our entire personal-computer business is our focus going forward," he said.

At Hong Kong-listed Lenovo, which does business in more than 160 countries, second-quarter shipments dipped 1.4 per cent year on year to 12.6 million units, giving it a 16.7 per cent global market share, IDC said.

That was enough for Lenovo to unseat HP, which posted a 7.7 per cent fall in shipments to 12.3 million units, resulting in a 16.4 per cent market share.

Alberto Moel, a senior analyst at Bernstein Research, said Lenovo's lead would not be safe in the near term.

"My guess is that Lenovo will move in and out of the No1 spot with every quarterly data," Moel said. "It may take a year or two before Lenovo stays on top for a full year." 

Lenovo first overtook HP in the third quarter of last year, but HP came back strongly in the following quarter to push Lenovo back to the No 2 spot. Before that stumble four quarters ago, HP had been the industry leader since the third quarter of 2006.

Yang said: "The battle for PC market leadership could certainly still go back and forth."

Lenovo, which has its headquarters in Beijing and in North Carolina in the United States, has kept pace with buying trends by building its own smartphone and media tablet businesses.

On the mainland, Lenovo is the No 2 smartphone brand and ranked third in tablet sales.

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