Lenovo looks to outflank rivals in townships

Lenovo Group is targeting domestic business in local towns as it sees its rivals eat away at its market share in the Asia Pacific PC market.

According to IDC, Lenovo’s shipment growth was 14.1 per cent in Q2, well behind the growth of its major rivals. Dell grew 38.8 per cent for the quarter with Hewlett-Packard just behind with 35.7 per cent. Total PC shipments for the region rose 19.6 per cent to reach 7.8 million units.

Lenovo’s ‘Township computer popularisation programme’ introduces a new consumer PC series called Yuanmeng and an e-classroom solution with the aim of targeting households and the education sector. CEO Yang Yuanqing is banking on domestic knowledge to boost its further penetration into the regional market. He said: "We are well positioned to capture the township market which offers tremendous growth potential, and hence further strengthen our market leadership."

Lenovo is also looking to grab a slice of the IT services market via a strategic alliance with AsiaInfo. Lenovo will transfer its non-telecom related IT services business to AsiaInfo in a deal worth RMB300 million ($36.3 million).

The Lenovo unit and AsiaInfo’s enterprise information solutions (EIS) business will then be merged into a new division called Lenovo-AsiaInfo. Lenovo posted a 21 per cent rise in Q1 profit despite continuing growth problems for its core PC unit. The firm posted profit of HK$337 million ($43.2 million) on revenue of HK$5.88 billion. The quarter included a one-time gain of HK$54 million from the sales of a printed circuit board business.

Hong Kong (CHN)