Lenovo to expand China PC market share
(Reuters)
Updated: 2005-09-28 16:30

Now, the expanded PC titan aims to outpace global market growth, Liu said, helping it compete with Dell and Hewlett-Packard Co. in grabbing market share from smaller Chinese players.

The trio have been slugging it out in the country's cut-throat PC arena, expanding their share of the market at the expense of smaller, generic players, analysts say.

"We hope we can double the growth rate, compared to the industry's," Liu told reporters on the sidelines of an industry forum in Shanghai, referring to Lenovo's global sales growth.

Asked if it was targeting a 35 percent market share, including IBM's sales, in China by the end of this year, Liu said: "Yes."

Lenovo has no plans for now to open factories outside of China, the executive added.

SHOULD BE CONFIDENT

Market researcher IDC expects worldwide PC shipments to jump 14.1 percent to 204 million units this year.

This month, it forecast that PC shipments in the Asia-Pacific would climb 14.8 percent in 2005, with China growing a tad faster at 14.9 percent.

Excluding IBM, Lenovo's share of the country's market stood at just 28 percent at the end of the second quarter.

The Chinese firm's landmark IBM acquisition had allowed it to vault into the upper echelons of a hotly competitive global computer business.

Lenovo's shares have surged since mid-July, up more than 50 percent over that period, as investor hopes grew that the company would quickly turn around the IBM division and become a global PC powerhouse.

Following the deal, chief executive Stephen Ward predicted the firm should double its profit within three years.

Lenovo's shares climbed 1.41 percent by midday, outperforming the Hong Kong market's 0.4 percent gain.

They have soared by nearly half since it and IBM announced the closing of their merger on May 1, vastly outperforming the market's near-10 percent climb over the same period.

But earlier this week, Chairman Yang Yuanqing cautioned that investors should lower their expectations for rapid growth while the company focuses on the long term.

"When our stock price went down after the acquisition I told our investors: you should have more confidence in this company,"' Yang told Reuters in an interview in Dubai.

"Right now I want to tell our investors to calm down and give us more time to fully integrate to get better performance."

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