Lenovo aims for market-beating 2010 growth

By : |March 10, 2010 0

BEIJING, CHINA: Lenovo Group, the world’s No. 4 PC brand, said it expects revenue and shipments to grow faster than its competitors in 2010, helped by the global economic recovery and a strong showing in its home market, China.

The company, which bought back its cellphone unit last year, was also aiming to become the Chinese market leader in that sector, Chief Executive Yang Yuanqing told Reuters in an interview on Thursday.

However, mobile communications would not make a meaningful contribution to the company’s bottom line for the next two years at least, as the company looked to grab market share from other established players, he said.

"The (mobile communications) market is still in a preliminary stage of development, and compared to global players, we understand the Chinese market better," Yang said.

"We can also build better relationships with local distributors and retailors, which is our advantage."

Yang declined to give a forecast on shipment figures this year, but said he expects to grow in line or better than the overall market as China’s economy continues to strengthen and the effects of the global economic slowdown become less pronounced.

The global PC market is expected to grow by more than 9 percent to about 310 million units in 2010, research firm IDC said, helped in part by a corporate refresh cycle brought about by Microsoft’s launch of its Windows 7 software in 2009.

The move helped boost Lenovo shares in late afternoon trade, with the stock closing the session up 2.22 percent, beating the benchmark Hang Seng index’s flat performance.

Lenovo will also look into expanding into providing software services and content as it pushes to expand its presence in the sector, Yang said.

"What we want to focus on right now is the high-end smartphone market, netbooks, and tablet PCs. To do so, we need to provide our clients with web services and content," Yang said.

The move comes as bigger rivals such as Acer say they too want to enter the software services market, as they look to diversify away from the competitive and commoditised PC sector.

Lenovo, like rivals Acer and Dell, joined a growing cast of traditional handset makers when it introduced a thin, touchscreen smartphone in January that runs on Google’s Android operating system.

Most market research firms such as IDC and Gartner expect smartphones to outgrow their PC peers in 2010, leading to a flurry of new entrants into the sector once dominated by cellphone makers such as Nokia and HTC.

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