Lenovo must learn to innovate to become the true high-tech leader

PUBLISHED : Wednesday, 17 October, 2012, 12:00am
UPDATED : Wednesday, 17 October, 2012, 3:14am


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China's quest to evolve beyond being "the factory of the world" to becoming the global leader in innovative hi-tech products by 2049 would seem to be clearly in reach. The electronics company Lenovo has, by the reckoning of leading research house Gartner, ousted Hewlett-Packard as the biggest personal computer maker. It is a remarkable achievement for a firm 45 years the junior of the Silicon Valley icon. But dominance of what is widely seen as a sunset product is nothing to crow about in so fast-changing an industry. To stay in front requires adaptability and constant creativity.

Lenovo seized an international foothold in the PC market seven years ago when it bought IBM's personal computer division. Gartner estimates that in the third quarter, it shipped 13.77 million units to take its market share to 15.7 per cent, 0.2 per cent more than HP's. The rise is the result of growing domestic demand, aggressive pricing and marketing and overseas acquisitions. Despite the firm's optimism for growth in the sector, the global outlook is not so rosy. Worldwide PC shipments fell a record 8 per cent in the period.

The firm's real competitor is not HP, after all, but Apple, Samsung and other makers of portable computing devices like tablets and smartphones. There is enormous growth in demand for these products and increasingly so as they become more powerful. This is where the future lies. Yet Lenovo has barely entered the market. Its brightest hope is its recently released line of convertible computers, a hybrid of a tablet and a laptop, which have screens that fold, twist and detach.

The idea is not new, but it is the sort of innovation that has to be tried if Chinese hi-tech companies are to beat foreign rivals and stay ahead. As history shows, there is no certainty with any new release. But if China is to truly to become a high-technology leader, it has to rely less on copying ideas and designs and making incremental improvements to existing technologies. To be a company like Apple, Lenovo has to create and make original intellectual property.