Lenovo narrows gap on HP with brisk 4th quarter

Lenovo posted the strongest sales gains among the world's top personal computer makers in the fourth quarter last year, closing the gap with industry leader Hewlett-Packard.

The mainland computer giant saw its global market share rise to a new high of 14 per cent, according to technology market research firms IDC and Gartner.

IDC estimated that Lenovo increased its shipments last quarter by 36.8 per cent to a record 13 million, up from 9.5 million a year earlier. By comparison, Gartner calculated Lenovo's shipments advanced 23 per cent in the last quarter to 12.9 million, from 10.5 million.

That stellar growth was achieved when total PC shipments declined due to a shortage of hard disk drives, slow economic conditions and stiff competition from other consumer electronics devices, such as media tablets and smart phones.

'Continuously low consumer PC demand resulted in weak holiday PC shipments,' said Mikako Kitagawa, a principal analyst at Gartner.

Total personal consumer shipments last quarter fell 1.4 per cent to 92.2 million units from 93.5 million a year earlier, according to Gartner. IDC saw a more modest 0.2 per cent decline last quarter to 92.7 million, from 92.9 million the previous year.

HP remained the industry's leading supplier with a 16 per cent global market share, but saw its fourth-quarter shipments fall 16 per cent year on year to about 15 million units.

Gartner estimates showed No 3 brand Dell seized a 12 per cent market share after its shipments improved 7.8 per cent. Fourth-ranked Taiwanese firm Acer had a 10.7 per cent market share, as its shipments fell 18.4 per cent.

AsusTek Computer held steady at fifth place, with 6.8 per cent, while its shipments grew 20.5 per cent.

Analysts attributed Lenovo's robust fourth-quarter performance to an aggressive pricing strategy in both the consumer and business markets, as well as an expanded distribution network achieved through strategic investments last year.

Hong Kong-listed Lenovo, which bought IBM's personal computer division for US$1.75 billion in 2005, paid about Euro466 million (HK$4.6 billion) to take over German consumer electronics firm Medion and boost its presence in Europe. It also invested US$175 million to form a joint venture with NEC and become the biggest supplier in Japan, the world's third-biggest market for PCs.

In a report, IHS iSuppli analyst Matthew Wilkins says Lenovo has mounted the most serious challenge to HP's No 1 ranking since Dell came within 2.7 points during the second quarter of 2008.

While Lenovo has set its sights on unseating HP as the world's top computer supplier by the end of this year, another strategic investment may be needed for the mainland computer maker to reach that milestone.

10

The number of months that Lenovo has grown faster than the industry. It's been the fastest growing computer maker for eight quarters