China's Lenovo Group, the world's No. 4 PC maker, is getting intention at Japan, Europe along using the U.S.
Lenovo, which in 2005 purchased IBM's (IBM) money-losing PC business, dominates at residence but seeks additional progress abroad.
In a offer targeting Europe, Lenovo in June obtained German PC maker Medion for $920 million. Also this year, Lenovo created a joint endeavor with NEC in Japan.
Those moves could help Lenovo shortly overtake Taiwan's Acer since the world's No. three PC maker, analysts say. while it'll be tougher for Lenovo to catch up with Nos. one and a few of Hewlett-Packard (HPQ) and Dell (DELL), Lenovo has long been developing speedier than either, many thanks to China.
Lenovo reported that its income for that yr ended March 31 rose 30% to $21.6 billion. For its fiscal yr ended Oct. 31, HP's exclusive techniques group, essentially its PC business, saw income go up 15%. Dell doesn't break out PCs alone, but its complete income rose 16% in its fiscal yr ended Jan. 28.
Lenovo holds 6% belonging in the direction of the U.S. PC market, says investigation organization Gartner. With Medion, it has 7.4% belonging in the direction of the Western Europe market. past to aligning with NEC, Lenovo experienced a 5.7% write about in Japan, says Gartner, but NEC has practically 18% of Japan's market.
Seeks A 10% Share
Rory Read, Lenovo's chief working officer, says the organization aims to grab 10% belonging in the direction of the U.S. and European PC markets. He says the "attack and defend" tactic produced by Lenovo CEO Yang Yuanqing is working. outside China, Lenovo is wanting to obtain write about in the two the customer market, in which it's weak, along using the organization market, in which it's powerful because of its "ThinkPad" computer pc line.
"On the shield side, we're like a boxer preserving our center and our head," look at mentioned in an interview. "Our center is our China organization and our mind is our think business. concerning the assault side, we're steering most ideal after tiny and medium-size businesses, and consumers."
He says Lenovo has the production quantity to purchase factors collectively with other provides in bulk, lowering costs for it and its customers.
Lenovo trades on Hong Kong's Hang Seng stock options exchange, in which its shares are right down 13% in 2011. Shares have gained because previous due may maybe when Lenovo reported that its quarterly revenue tripled. look at says the organization has mulled buying and selling from the U.S., but says positively nothing is imminent.
Bigger person Base
"We're invariably looking at rules on how to expand the person base," he said. "There's attention in the (mainland) China listing and, of course, a producer ny listing is attractive.
"From a standpoint of what's essential — let's stick to our knitting, preserve growing, preserve getting share. If we preserve producing excellent results, then we are able to expand the person base. We're gratified with Hang Seng, but we're certainly looking at a broad range of options and expanding the base."
In June, Yuanqing purchased about 8% belonging in the direction of the company's shares for additional than $400 million from its parent company, Legend Holdings.
Lenovo struggled most ideal after getting IBM's PC business, especially most ideal after the around the earth fiscal turmoil strike in 2008. Yuanqing, named chairman most ideal after the IBM deal, returned as CEO in feb 2009. That November, Yuanqing reacquired Lenovo's cell unit, which experienced been marketed to Legend Holdings in what proved for getting a strategic mistake.
Besides PCs, Lenovo aims to market additional smartphones and tablets. It unveiled its 1st smartphone, the Ophone, in China earlier this year.
In the U.S., Lenovo programs to roll out three tablet computers. Two are slated for getting out this summer time and will work on search engines like google 's (GOOG) Android working system. another will work Microsoft's (MSFT) glass windows and is also anticipated out by year's end.
Read is most upbeat about an Android ThinkPad-branded product aimed on the organization market. It'll element a stylus for writing.
Lenovo has upped marketing and marketing from the U.S. for its "Idea" collection of customer exclusive computers. It advertised through tv set telecasts belonging in the direction of the NBA basketball finals in June. look at says Lenovo is concentrated on making computer and desktop personal computers that will very easily entry cloud-based services.
But it's the longtime concentrate concerning the organization marketplace that is Lenovo's strength, says Steve Kleynhans, a Gartner analyst.
"That's a as well as for them since the powerful element belonging in the direction of the PC marketplace most ideal now is enterprise, which could be steering through an enormous refresh (upgrade) of PCs," Kleynhans said. "In the customer market, there's an opportunity for them.
"It's just about finding the producer recognition. males and girls don't know who Lenovo is in lots of cases. think is well-established in mature markets. They should ride the think brand's coattails."
Buying Germany's Medion, which focuses on customer PCs, was a superb proceed for Lenovo, says David Daoud, director of investigation for exclusive computing for marketplace tracker IDC. He says Lenovo struck back again at Acer, which in 2007 outmaneuvered Lenovo in Europe by acquiring Packard Bell from NEC.
"Lenovo has long been wanting to obtain a method to develop write about in Europe," Daoud said. getting Medion "is a superb tactic B."
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