Pioneer PC maker Apple is now world’s most popular company for computers, phones and tablets. We may say the same for the Chinese giant Lenovo one day, but not yet.
Lenovo had made some in-roads in the smartphone market, but it is also competing with HP and Dell to be the world’s biggest PC maker. With record stock prices and consumer appeal amidst PC pricing wars, strategic mergers and acquisitions in recent years, along with the home-grown support of the Chinese market, Lenovo only continues to gain ground.
According to IDC data, Lenovo’s worldwide PC market share is ranked second at 14.9 percent compared to HP’s 15.5 percent. Gartner’s data shows that Lenovo’s share is only 0.2 percentage points lower than the HP.
But back to the question of where Lenovo wants to be in near future.
Strategy: Protect & Attack
Lenovo likes to talk about PC Plus devices – hybrid tablet/netbook devices/smartphones. The Company’s ‘Protect and Attack’ strategy – protecting the two profit pools of global commercial PC and the China businesses, while attacking three high growth opportunities in emerging markets, global consumer and PC Plus products, such as smartphones, tablets and smart TVs – continues to deliver results.
Lenovo’s Attack businesses delivered 50 percent of the Company’s revenues during third quarter, and attack revenues were 32 percent. Its Mobile Internet and Digital Home revenues, which include its smartphone, tablet and smart TV businesses, registered record 11 percent of company revenue this quarter, up 77 percent year over year.
Since Lenovo’s smartphone business is starting to become profitable, the company has room to invest more in product development, marketing and building distribution channels, which are keys for sustainable business in the global smartphone industry.
Smartphones sales have roared over the past two years, with Apple and Samsung in particular seeing a dramatic growth in handset sales, both in developed and emerging markets. But while competition intensifies at the top end of the market, Lenovo sees untapped potential at the lower end.
With an iPhone or Galaxy costing upwards of $300, high end smartphone technology is beyond the reach of many in emerging markets. That’s where Lenovo steps in with its cheaper touch-screen smartphone devices.
First launched the smartphone in China in 2010, the company already became the second largest selling brand of smartphones in China market, overtaking Apple. Lenovo is also targeting markets in Russia, Indonesia, India, the Philippines and Vietnam.
Lenovo shipped 9.4 million smartphones during the quarter. Lenovo claims to have a larger smartphone market share in China than ZTE Corp and Huawei Technologies Co Ltd.
Leading manufacturer of computers
So what about the PC market? The PC market has been slowly declining in post PC era. Worldwide unit shipments in Q4 fell to around 90 million, a 5 percent decrease compared to the year before.
Lenovo is redefining how personal computer businesses should be run, and the company has the numbers and facts to support this grand claim – 13 consecutive quarters of sales growth, 15 consecutive quarters of outperforming the PC industry, and sales growth across all major geographic regions.
Lenovo’s challenge is to become a leading manufacturer of computers (desktop and laptop) in every region of the world. And little by little, it is succeeding. One of the most notable steps forward in recent times has been in EMEA, i.e. Europe, Middle East and Africa, where it already occupies the second place and has a market share of 11.1 percent, according to IDC’s latest report. Traditionally strong in the China market, Lenovo is managing to penetrate its success to the all-important US, where HP and Dell have strong holds. The company saw 11 percent growth year-on-year — not too shabby in a market that fell 7 percent overall.
IDC highlights the company’s growth and success in Russia, Germany, Denmark and Lebanon, where Lenovo ranks first. HP is still the largest PC maker, with dominance in professional PCs helping it recapture the top spot. Dell slipped to fifth place and faces pressure from HP and Lenovo in the professional PC segment, where both vendors are looking to gain shares.
Lenovo, which just released a new ThinkPad yesterday, is looking to future operating systems and partners for continued growth and relevance. The company has already lined up some fantastic Windows 8 convertibles (hybrid devices) including the Thinkpad Twist, the IdeaTab Lynx, and the Yoga 13. Lenovo’s CEO, Yuanqing Yang, believes that innovation is the key to success in the new Windows 8 market. The company also plans to increase the number of plants in most of its major markets. It is building a plant in the U.S. to increase the PC and mobile shipments.